The association's chief executive has been meeting with Brexit ministers twice a month to represent the hospitality sector and she believes there is an appetite from the Government to find a solution to avoid a 'cliff edge' fall in pub employment post-Brexit.
"We are seeing quite a significant shift and a Government appetite for finding a solution so there is going to be no cliff edge and there is going to be a right to remain - irrespective of whether you have applied for your residency.
"Anybody who is currently allowed to be in this country and work will have a right to remain at the point article 50 is triggered.
"That's largely because the Government has no means of identifying where those people are; they don't know where they are in the economy, where they are in the system, or if they've come out and gone in again so there is no way they can do anything other than give them an automatic right," she said.
Nicholls added that when the UK formally leaves the EU, which is expected to be in mid-2019, there was likely to be some form of industry-specific transitional arrangement for the hospitality workforce.
"In my last meeting with Brexit secretary David Davies, he said that it is going to take two to five years to replace the migrant workers in our sector so we would be given two to five years to have that wash through.
"For that reason I can't see there being a cliff edge [after Brexit], but they [the Government] do need to come up with something. A guest worker permit is what we've proposed to them."
'We won't collapse'
The ALMR's chief executive was speaking on a panel at an event organised by Christie & Co to discuss what has been billed as a 'perfect storm' of challenges faced by the pub industry.
Kris Gumbrell, executive chairman of Brewhouse & Kitchen, voiced his confidence in the trade - regardless of the challenges presented by Brexit and other factors.
"There's no doubt about it. We won't collapse - we never do. I've heard it said that we as an industry are self-healing. Brexit is going to be tricky, but hopefully common sense will prevail [in Government]," he said.