Arson investigators say 32-year-old Idriss Cherifi worked at the Hostel Cat at 1236 S. Las Vegas Boulevard and had been fired earlier in the day for allegedly getting into an altercation with guests.
Firefighters responded to the incident shortly before 4 a.m.
Guests told firefighters a person set fire to the room while four people were sleeping in two bunk beds.
Crews say everyone had evacuated the building and nobody was hurt during the incident.
The fire caused $2,000 damage to personal items and mattresses, but the building was not damaged. Crews say the fire sprinkler system had put most of the fire out.
Cherifi was located by authorities at the Greyhound bus depot downtown and arrested for arson. He had just purchased a ticket and was attempting to leave town, authorities say.
Cherifi is being held at Clark County Detention Center on $20,000 bail.
He is scheduled to appear in court on Friday.