The terrorist attack in the port city of Kismayo also left more than 50 people seriously injured.
At least four al-Shabab extremists stormed the Asasey Hotel on Friday evening. The attack began with a suicide car bomb at the entrance gate, then an assault by gunmen.
The bomb blast left holes in balconies and obliterated an outdoor seating area.
Journalist Jamal Osman who saw the aftermath said: “I saw a notebook of someone who was planning a meeting she or he will never attend, suitcases of someone who just arrived in Kismayo, a half-full cup of tea that will never be finished.”
Fifty-six people were injured and 26 died before Somali forces ended the siege which lasted more than 14 hours.
Among the dead foreigners were three Kenyans, three Tanzanians, two Americans, a Canadian and a Briton, according to Ahmed Madobe, the president of Jubbaland regional state.
Somali troops shot dead all attackers in the hotel compound, a police spokesman said.
The Briton who died has not been named. The Foreign Office said: “We are in touch with the local Somali authorities and seeking more information following an explosion in Kismayo.”
Somalia’s Islamic extremist rebels, al-Shabab, have claimed responsibility for the attack.
The group, which is allied to al Qaida, often uses car bombs to infiltrate heavily fortified targets.
Among those killed were Canadian journalist Hodan Nalayeh and her husband Farid Jama Suleiman.