Staff at the hotel said they heard a loud bang, followed by a crashing noise as the Daihatsu hatchback crashed backwards through the front veranda and front windows of the dining room.
The car has also damaged the corner of the hotel with the front wall visibly pushed in.
One of the waiters told the Rotorua Daily Post he had only one minute earlier been standing near the window making up one of the tables, so he said thankfully he had moved away.
Two women at the hotel who were in the car declined to comment but said they were not hurt.
A bystander, who didn't want to be named, said he couldn't work out how the car ended up crashing backwards into the hotel.
"My only guess is she's driven it at speed from a park right across the other side of the road."