Among the dead are a man, his daughter and son and a guest who had been staying at his residence.
A special phase of the ongoing census to count the homeless dwellers of Karachi commenced on Tuesday night.
The 17 workers had been stranded abroad for months after the Egyptian govt confiscated their passports.
The hotel had no fire exits or fire alarms: Karachi mayor.
Earlier, four 'missing' members of PIA employees JAC were released by unidentified men in various parts of the city.
Bodies of three women, three men and seven children have been recovered from beneath the rubble.
Police term the attack a reaction to the Lyari operation as 32 suspects have been arrested during last 30 days.