Surfpoint Backpacker's Hostel manager Will Carter said more than 200 Prevelly residents had gathered on the beach near the mouth of the Margaret River, about 280km south of Perth, after being forced out of their homes by the blaze.
"We had the call to evacuate and we travelled to the river mouth, which is near the ocean, because the main road is blocked off," he said.
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"There's one road in and out of Prevelly, but when there's a fire - just like last time - everyone in Prevelly is put at risk.
"There are about 20 of us at the river mouth and probably a couple of hundred people at Surf Point, on the beach, waiting for the fire to die down."
WA's Department of Conservation (DEC) confirmed at 5pm (WST) on Wednesday "several homes" had been engulfed in flames, with media reports of 10 or more homes destroyed.
Mr Carter said it was "unbelievable" the DEC had caused the fire.
The department confirmed the blaze had started when a prescribed burn got out of control in nearby Leeuwin-Naturaliste National Park on Wednesday morning.
"It's a laughable scenario," Mr Carter said.
"The wind has been blowing so much down here today, I cannot believe they decided to do a burn today."
