The call was made by Elephant and Castle manager Campbell Gibson at approximately 10:20am after a dryer at the back of the hotel, containing tea towels, caught fire.

"The dryer malfunctioned with the towels in there," he said.

"We were just worried about the gas hot water that was nearby and if that would catch fire too." 

Fire crews arrived at the scene four minutes after the call was made, during which time the six people and one dog occupying the building were evacuated.

The fire had been semi-contained by Mr Gibson, whose quick thinking with a fire extinguisher helped save the building, before fire crews took over.

Firefighters could be seen opening upstairs windows after the blaze had been put out. 

Mr Gibson was praised for his actions by Bathurst Fire Brigade station manager Ross Bramich.

"The building was saved by the actions of the manager and the NSW Fire Brigade," he said. 

Minor damage has been sustained to the laundry, with evidence of smoke damage to the area and fire damage to the dryer itself.

No one was hurt in the incident and the fire will not impact on the operation of the Elephant and Castle.

Although the fire was not a result of a clogged lint filter, Mr Bramich did issue a warning to the public to monitor their dryers and regularly clean them.

"Just a reminder as we come into the cooler months, to ensure that people clean the lint filter of their dryers [to avoid a fire],"  he said.