Despite the blaze at the Address hotel, the display at the nearby Burj Khalifa, the tallest building in the world, started as planned at midnight.
Officials say the fire has been brought largely under control and 16 people suffered mostly minor injures.
It is unclear what caused the blaze, which broke out as large crowds had gathered to ring in the new year.
People were asked to leave the area around the Address Downtown Hotel, which was evacuated.
There were also thousands of people in the streets below and in the adjacent buildings, all waiting to view the highly anticipated New Year's Eve fireworks display, among them my youngest sister.
After checking on my sister, I hastily decided to head out to downtown Dubai in the hope of seeing the scene on the ground for myself.
As I approached downtown, I realised that the normally brightly illuminated Burj Khalifa was only half-lit and I could barely see the imposing structure amid the black smoke from the Address Hotel.
I did not expect to spend the next four hours right outside the downtown area, in one of the worst traffic jams I have ever encountered.
As the clock struck midnight, I resigned myself to ringing in the New Year among thousands of strangers, all gazing out of our cars towards Burj Khalifa's spectacular fireworks display, alongside a burning hotel.It started on the 20th floor, officials said, and had not spread inside the building, they claimed.The Dubai government tweeted that 14 people had suffered minor injuries, one moderate injuries and there was one "heart attack case" due to "overcrowding and smoke".Irish singer Anita Williams, who was performing at the hotel when the fire began, told the BBC that people left in a "stampede"."We left everything. There was debris falling down. It [the fire] just shot up through the entire hotel.
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