Great South Rd was shut as at least 25 police vehicles responded to the incident, an NZME photographer at the scene said.
Watson said the immediate scene is safe and more information would be provided as it comes to light.
“All I can say is the immediate scene is safe, we’re making inquiries to identify who this offender is.”
Police are aware that the offender was carrying a long-barrelled firearm.
At least 15 armed police officers surrounded the hotel upon arrival. Residents of the hotel were lining the footpath of Great South Rd as police investigated.
No injuries were reported.
“There’s a lot of occupants in there... young families, older people as such, but at this stage all the inquiries reveal that they’re all safe and sound,” Watson said.
Great South Rd between Puhinui Rd and Carlie St reopened shortly before 8.30pm.
Watson said police would be in attendance at the hotel for some time as a scene examination is completed.
Benjamin Plummer is an Auckland-based reporter who covers breaking news. He has worked for the Herald since 2022.