Global economic crisis hits German sex industry

By Erik Kirschbaum

BERLIN (Reuters) - It did not take long for the world financial crisis to affect the world's oldest profession in Germany.

In one of the few countries where prostitution is legal, and unusually transparent, the industry has responded with an economic stimulus package of its own: modern marketing tools, rebates and gimmicks to boost falling demand.

Some brothels have cut prices or added free promotions while others have introduced all-inclusive flat-rate fees. Free shuttle buses, discounts for seniors and taxi drivers, as well as "day passes" are among marketing strategies designed to keep business going.

"Times are tough for us too," said Karin Ahrens, who manages the "Yes, Sir" brothel in Hanover. She told Reuters revenue had dropped by 30 percent at her establishment while turnover had fallen by as much as 50 percent at other clubs.

"We're definitely feeling the crisis. Clients are being tight with their money. They're afraid. You can't charge for the extras any more and there is pressure to cut prices. Everyone wants a deal. Special promotions are essential these days."

Germany has about 400,000 professional prostitutes. Official figures do not distinguish between the sexes and the number of male prostitutes is not known, but they account for a small fraction of the total and are treated the same under the law.

In 2002, new legislation allowed prostitutes to advertise and to enter into formal labor contracts. It opened the way for them to obtain health insurance, previously refused if they listed their true profession.

Annual revenues are about 14 billion euros ($18 billion), according to an estimate by the Verdi services union. Taxes on prostitution are an important source of income for some cities.

Prostitution is also legal and regulated in the Netherlands, Austria, Switzerland, Hungary, Greece, Turkey and in some parts of Australia, and the U.S. state of Nevada.

In other countries, such as Luxembourg, Latvia, Denmark, Belgium and Finland, it is legal but brothels and pimping are not.

"CREATIVE SOLUTIONS"

Berlin's "Pussy Club" has attracted media attention with its headline-grabbing "flat rate" -- a 70-euro admission charge for unlimited food, drink and sex between 10 a.m. and 4 p.m.

"You've got to come up with creative solutions these days," said club manager Stefan, who requested his surname not be published. "We're feeling the economic crisis, too, even though business has fortunately been more or less okay for us so far.

"Our offer might sound like it's too good to be true, but it's real. You can eat as much as you want, drink as much as you want and have as much sex as you want."

Stefan, who runs other establishments in Heidelberg and Wuppertal besides the Berlin club, said the flat rate had helped keep the 30 women working in each location fully employed.