MLAs were told on Thursday that some pubs and restaurants in Belfast will “not survive” the drop in trade caused by flag protests.
The warning was sounded by the chief executive of Pubs of Ulster Colin Neil who said the licensed trade had been “affected badly” by the protests.
He told Stormont’s enterprise committee that members had seen their December turnover “fall off a cliff”.
Loyalist protests have raged since December 3 when Belfast City Council voted by 29-21 to restrict the flying of the union flag on City Hall to just designated days.
The majority of the street protests passed without incident, but some resulted in serious rioting.
Colin Neill said the hospitality industry usually took in a third of its yearly revenue in the last five weeks of the year.
But last year there had been a 54 per cent drop in this key period, and that was “unsustainable”.
Mr Neill said that although they had seen success with the Backin’ Belfast campaign, the situation was “so fragile” and “any word of a protest” saw custom “tail off”.
He also said international reporting of the flag protest caused Northern Ireland’s reputation worldwide damage.
“It gave the impression that all of Belfast was a no-go area,” he said.
“We have a big job to try and repair Northern Ireland’s international image.”
Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association, hailed the successes of the Backin’ Belfast campaign and said offers to encourage people to shop and eat out in the city centre had been continually reposted on Twitter.
“Sometimes when you have times of crisis, the best innovations come out,” he said.