Nobody was injured in the blaze, which broke out at around 6.30am at the 55-hectare Prà delle Torri holiday resort in Caorle, near Venice.
It was reported on Tuesday that the fire was caused by a 55-year-old Danish man, who left one or more candles burning when he and his family went to bed on Sunday night.
Read more: Danes cause Venice campsite fire due to burning candles
Fanned by strong winds over the Italy's Adriatic coast, the flames tore through an area of the resort filled with bungalows - transforming many visitors' stay into a holiday from hell.
"The flames spread really quickly, we weren't able to do anything and have lost everything," Today.it reported one of the guests as saying.
"We ran away as soon as we saw the flames just a few metres away from us."
Some forty families of international holidaymakers reportedly lost their possessions in the fire, which reduced rows of the wooden holiday homes to ash.
"It looked like it had been bombed," another guest told the paper.
The flames destroyed tens of wooden bungalows. Photo: Vigili del fuoco
As the drama unfolded, a huge column of black smoke could be seen hanging above the resort, which accommodates up to 7,500 visitors.
The resort includes a hotel, a campsite, a golf-course, a swimming pool and several holiday homes.
A video of the incident can be seen below.
It is thought the cause of the fire was a portable cooking stove which guests were using to prepare breakfast.
Reports suggest the fire has caused hundreds of thousands of euros worth of damage.