Someone phoned the three-star Victorian hotel at 10.15am today and told a member of staff that a bomb had been planted.
Everyone inside was evacuated before specialist teams conducted a thorough search of the building and surrounding area.
North Yorkshire Police say officers “have found no evidence of any threat to public safety” and the telephone call has “now been proven to be a bomb hoax”.
In a statement, the force added: “Access to the building has now been authorised, staff and guests have been allowed to return and the cordon has been removed.
“The safety of everyone in the area and the emergency services who attended is our priority and we thank the staff, guests of the hotel and members of the public for their patience while we worked to establish the circumstances around the incident.”
An investigation is underway and police are appealing for information, but no arrests have been made yet.
The hotel, which was built in the town centre in 1863 and is now run by Britannia Hotels, has been heavily criticised in recent months by guests who have complained about the poor condition of the building and dirty rooms.
Scarborough Borough Council said it has written to the owners to request a meeting to discuss the "recent reported problems".