The four-star York Hotel in Portstewart has gone into administration.
The popular hotel is run by the Pollock family.
It is understood that Hotel staff were told of the news last Monday night, and Gary Borland of accountacy firm, KPMG has been appointed as the administrator.
Independent councillor Christine Alexander said the closure was bad news for staff and disappointing for residents and visitors alike.
“Portstewart has been enjoying a comeback with lots of good hotels and restaurants attracting tourists from home and abroad,” she said. “It was a shock for local people on Monday night to hear that it had been closed. The hotel had been associated with the Pollock family for some time and was a good local employer.
“I’m disappointed for the staff and it is unfortunate that a potentially good business has gone into administration, it is the last thing that the area needs.”
Independent MLA Claire Sugden described the closure of the hotel as a ‘blow to the area’.
She said: “Last week the Minister for Social Development, Nelson McCausland, announced he was investigating the potential for a new hotel in Portrush to capitalise on this area as a prime tourism destination.
“This announcement now seems ironic as two businesses, The York Hotel and Jackman and Pye, have shown how they are facing difficulties.
“I don’t think anyone in Northern Ireland would dispute the quality of the hospitality sector here. This was highlighted this week by Shola Coach House taking the runner-up spot in the TripAdvisor’s annual travellers’ choice awards.
“I have spoken with a number of hotels who are struggling, and have expressed my concerns to the Executive about the high rate of hospitality VAT in Northern Ireland. They must first support local existing businesses to ensure that they can survive and prosper.”