Police said a furnace in the hotel malfunctioned and at least 200 people were evacuated.
Hotel employees tell Newswatch 16 the hotel was almost at full capacity.
A Dunmore police officer was called to the hotel after two guests fell ill, and he called the fire department.
An alarm sounded and guests left the hotel.
Guests lined up outside waiting to be checked by first responders.
Melissa Finegan, and EMT, was using a fingertip monitor to test guests' CO levels. She says, "It's toxic, it's poison,they could pass out, it could be life threatening."
The sickest guests were transported by ambulance, others were taken to Geisinger CMC on a school bus.
Bianca Noel was at the hotel in anticipation of moving into her dorm at Marywood University, but had a bad headache and decided to get checked out.
She says, "I wanted to be in there unpacking, but I am still here."
As the wait to get back into the hotel dragged on, some tempers began to fray.
"People needed water to take their medicine, people needed to use the bathrooms, people needed food since we didn't eat breakfast," said Michael Noel of Philadelphia.
Eventually people were allowed to remove their possessions, but the hotel will be closed until the investigation is complete. Guests are being re-booked at two other area hotels.