A major French hotel development in Belfast city centre could be abandoned due to the loyalist flag protests.
Hospitality firm Accor is trying to get out of its agreement for the planned hotel, the city's Chamber of Trade and Commerce has claimed.
There have been weeks of roadblocks and sporadic violence which has left more than 120 police officers injured but the situation has been relatively calm in recent days.
Chairman Joe Jordan told Stormont MLAs: "Accor hotels are now saying to me that they want to pull out of the lease for the Novotel. We have lawyers working on that at the minute. They are trying to get loopholes to get out of this agreement and the whole reason they are trying to get out of the agreement is purely based on the last nine weeks."
Mr Jordan blamed perceptions encouraged by media coverage of street protests. "This is one or two streets in East Belfast where it continues to happen," he said. "If you listen to the media, next to Syria is Northern Ireland."
Loyalists angry at the decision to restrict flag flying to designated days like royal birthdays have organised weeks of protests involving blocking roads. Some demonstrations degenerated into violence, with petrol bombs and other missiles thrown and 146 police officers injured.
Accor bills itself as the world's leading hotel operator and market leader in Europe, present in 92 countries with more than 3,500 hotels and 440,000 rooms. It has more than 160,000 employees. As well as the mid-market Novotel, the company's other brands include ibis and Sofitel. The firm already owns two ibis hotels in Belfast city centre.
The proposed development on Great Victoria Street, in a busy shopping and nightlife centre, would have 15 floors and 173 bedrooms. It was granted planning permission last September for a space housing old offices and the project was expected to begin this year. The site is near where loyalist rioters confronted police last month, burning a car just off the main street while horrified guests in a nearby Days Hotel looked on from their bedrooms.
An Accor spokesman said: "We can confirm that Accor will be opening a third hotel in Belfast this summer and has other development projects." Accor also has planning approval for another new hotel in Belfast, an Etap. The spokeswoman could not clarify which hotel is opening this summer.
The Chamber of Commerce said protests which are damaging Belfast's economy on the busiest day of the week should be moved to Saturday mornings to allow afternoon shopping to proceed.