The 25-year-old Briton told police that she was staying in the first floor of a hotel in Agra's cantonment area when someone tried to molest her.
She told police she had told the hotel staff to wake her up early so that she could catch a bus to Jaipur. But she got scared after a hotel employee "offered to give her a massage".
Since he knocked twice and would not leave, the frightened woman jumped from the balcony, injuring her leg. She rushed to the nearest police booth to file a complaint.
The arrested hotel owner denied the allegation, saying he had only tried to wake her up.
Two policemen are providing the woman security at her new hotel. A British consular team is in Agra to assist her.
"A consular team has spoken to her and is providing her assistance. She is under police protection," a British high commission official said in New Delhi.
The incident comes close on the heels of the gang-rape of a Swiss tourist in Madhya Pradesh's Datia district.
The woman, an adventure tourist, had set up camp near a forest along with her husband when she was raped by eight men who also stole their laptop, camera and cash.