More than a dozen police cars gathered by the Ibis Budget Hotel in Salford Quays, Greater Manchester, after the crash at 9pm.
At least three ambulances were also seen outside the building, which is half a mile from Manchester United's iconic Old Trafford ground.
The crash happened in the car park of the Ibis Hotel, which is also connected to the AC Hotel, which is run by Marriott.
Witnesses described hearing people screaming and armed police flooding the area.
It has since emerged that the armed officers only attended as they were nearby at the time.
Lindsay Avery wrote on Facebook: 'I heard the screams and saw people in panic.
'I called an ambulance because it seemed someone had been hit by a car. I couldn't actually see anything though, just some very distressed people.'
Manchester Evening News reporter Samantha Yarwood described seeing police talking to a 'little girl on a bench' who 'appears to be wrapped in a towel'.
Police Sergeant Brian Orr of the GMP Serious Collision Investigation Unit said: 'This was a heart-breaking incident involving a young boy which has understandably left his family distraught and the thoughts of everyone in the SCIU are with them at this terrible time.
'At the moment this appears to have been a truly tragic accident and not a suspicious incident; however we have launched an investigation to establish a full understanding of exactly what happened.
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