Storm surges have reached as high as the third storey of some hotels as Hurricane Wilma batters Mexico's popular Cancun resort area.
Even though slightly weakened, it felled trees and tore off roofs as thousands stayed in emergency shelters.
Local governor Felix Gonzales said winds of 140mph (225km/h) had damaged buildings considered hurricane-proof.
But there are no reports of casualties. There have been some reports of looting.
Wilma is expected to linger over the Yucatan peninsula until early on Monday, said the US National Hurricane Center.
It was downgraded to a Category Three hurricane early on Saturday and by 1800GMT to a Category Two, with winds of 110 mph (177km/h).
But the National Hurricane Center in the US still described Wilma as "really clobbering north-eastern Yucatan".
In Cuba, some 370,000 people have been ordered out of the hurricane's path as it lashes western areas with heavy winds and rain.
And people are fleeing their homes in Florida, which the storm is expected to reach early next week.
Hundreds of thousands of tourists and residents have moved to shelters in Cancun.
The hurricane has already left Cancun without electricity and with only sporadic telephone service, with hundreds of power and telephone poles torn down.
Huge waves are crashing on to Cuba's westernmost tip, and heavy rains were reported to have cut off several small communities.
In Florida, Governor Jeb Bush has declared a state of emergency, although mandatory evacuations for Florida Keys residents were put back, as Wilma's slow speed means it may not arrive until Monday.
The year 2005 has been one of the most destructive hurricane seasons on record. Wilma is the 12th of the year - a figure equalled only once, in 1969, since record-keeping began in 1851.
By one measure, Wilma was the strongest ever, with the lowest barometric pressure on record in the Atlantic basin.
Thousands of people died in Central America earlier this month in landslides and floods following torrential rains brought by Hurricane Stan.
PHOTO CAPTION
Stranded people stand on a balcony of a hotel in flooded downtown Cancun, Mexico as Hurricane Wilma batters the Yucatan Peninsula on Saturday Oct. 22, 2005 in Cancun, Mexico. (AP)