"We just about lost our local pub," Luggate fire chief Rod Anderson said.
"I think you'd say it was quite a good save.
"It happened right in the middle of the village so we weren't very long getting here, but just as well, because the flames were licking around the pub and it was pretty close."
The tractor, which belonged to Murdoch Agg Services, had been used to mow hay and was just 4m from the hotel when it caught alight about 4pm. Mr Anderson suspected dry grass built up around the tractor's hot motor or exhaust was the cause of the fire.
Eight members of the Luggate Volunteer Fire Brigade attended the blaze, which was brought under control in about 20 minutes.
Half a dozen patrons and several staff members were evacuated from the hotel and State Highway 6 was closed to traffic for about 15 minutes. Power lines next to the hotel were damaged but power in the area was not lost.
Mr Anderson said explosions heard by residents during the fire were the tractor's tyres blowing out.
Tractor owner Colin Murdoch said the driver, who was inside the hotel when the fire started, was lucky to have been able to save his dog, which was in the tractor.
Hotel manager Tasha Jones said she was extremely grateful for the fire brigade's prompt response.
- With Cris Johnson
