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Financial Crisis Tames Demand for World’s Oldest Service

Published: December 8, 2008

PRAGUE — On a recent night at Big Sister, which calls itself the world’s biggest Internet brothel, a middle-aged man selected a prostitute by pressing an electronic menu on a flat-screen TV to review the age, hair color, weight and languages spoken by the women on offer.

Once he had chosen an 18-year-old brunette, he put on a mandatory terry-cloth robe and proceeded to one of the brothel’s luridly lighted theme rooms: an Alpine suite decorated with foam rubber mountains covered with fake snow.

Nearby, in the brothel’s cramped control room, two young technicians worked dozens of hidden cameras that would film the man’s performance and stream it, live, onto Big Sister’s Web site.

Customers can have sex free of charge at Big Sister, in return for signing a release form allowing the brothel to film their sexual exploits.

But even with this financial incentive, Carl Borowitz, 26, Big Sister’s marketing manager, a Moravian computer engineer, lamented that the global financial crisis had diminished the number of sex tourists coming to Prague.

“Sex is a steady demand, because everyone needs it, and it used to be taboo, which made a service like ours all the more attractive,” said Mr. Borowitz, who looks more like Harry Potter than Larry Flynt. “But the problem today is that there is too much competition and our clients don’t have as much disposable income as before.”

In the Czech Republic, where prostitution operates in a legal gray zone, the sex industry is big business, generating more than $500 million in annual revenues, 60 percent of which is derived from foreign visitors, according to Mag Consulting, a Prague-based research firm that studies the industry.

Big Sister is not the only brothel suffering the effects of a battered global economy. While the world’s oldest profession may also be one of its most recession-proof businesses, brothel owners in Europe and the United States say the global financial crisis is hurting a once lucrative industry.

Egbert Krumeich, the manager of Artemis, Berlin’s largest brothel, said that in November, usually peak season for the sex trade, revenues were down by 20 percent. In Reno, Nev., the famed Mustang Ranch recently laid off 30 percent of its staff, citing a decline in high-spending clients.

Big Sister is not struggling as much as some of its more traditional rivals, since its revenues are largely derived from the 30 euros a month, or about $38, its 10,000 clients pay to gain access to its site.

But Mr. Borowitz said Big Sister hoped to offset a 15 percent drop in revenues over the past quarter by expanding into the United States. The brothel also produces cable TV shows that air on Sky Italia and Britain’s Television X, as well as DVDs like “World Cup Love Truck.”

Ester, an 18-year-old prostitute at Big Sister who declined to give her last name, said that big-spending clients had diminished, but that she was still earning nearly 2,000 euros a month — enough to pay the rent and buy Louis Vuitton bags. “The reason to do this is for the money,” she said, after gyrating half-naked on a pole. Being filmed, she added, made her feel more like an actress than a sex object.

Since the fall of Communism in 1989, the Czech Republic has become a major transit and destination country for women and girls trafficked from countries farther east like Ukraine, Russia, Belarus and Moldova, according to the police.

For nearly 20 years, tens of thousands of sex tourists have streamed into Prague, the pristinely beautiful Czech capital, drawn by inexpensive erotic services, an atmosphere of anonymity for customers and a liberal population tolerant of adultery. According to Mag Consulting, 14 percent of Czech men admit to having sex with prostitutes, compared with a European Union average of 10 percent.

Dozens of cheap flights to Prague have also ensured a flow of bachelor parties from across Europe, with multiple daily flights from Britain alone.

Jaromir Beranek, an analyst with Mag Consulting, said the strength of the Czech crown against the euro, lower spending power and competition from lower-cost sex capitals like Riga, Latvia, and Krakow, Poland, were threatening one of the country’s most thriving sectors.

Many Czechs are more than happy to see Prague shrug off its reputation as one of the world’s top 20 sex destinations. But some in the hotel industry are so alarmed by the drop in tourists that they are lobbying the government to legalize the trade, in the hope that it will help lure more clients.

While some critics have warned that legalization would effectively transform the Czech state into the country’s biggest pimp, the Czech government is considering whether to emulate the Netherlands and Germany by regulating prostitution like any other industry. It is considering passing legislation by the end of the year that would require the Czech Republic’s estimated 10,000 prostitutes to register with the local authorities.

Dzamila Stehlikova, a minister from the Green Party, who is shepherding the bill through Parliament, argued that by forcing the business out into the open, it would make it harder for human traffickers to thrive, while helping to ensure mandatory health checkups for prostitutes. Other advocates argued that legalization would generate millions of euros in lost tax revenue from an industry that was largely underground.

Not everyone is enthusiastic; the prostitutes themselves say that being issued prostitution identification cards would further stigmatize them.

Hana Malinova, director of Bliss Without Risk, a prostitution outreach group, said she feared the current credit crunch was pushing more poor women into prostitution, since they could make more money selling their bodies — about 120 euros for a half-hour session at some upscale sex clubs in Prague — than flipping burgers at McDonald’s.

Even with the downturn, she added, prostitution was far more resilient than other industries, though the downturn was discouraging adultery.

“An Austrian farmer from a remote area who is not married will still cross the border to the Czech Republic looking for sex,” she said. “On the other hand, the recession is helping to keep husbands at home who might otherwise be cheating on their wives.”

In Czech towns near the German border in northern Bohemia, long blighted by a daily influx of sex tourists, many are happy that the business is suffering.

Only a few years ago the town of Dubi was so overrun by prostitution that a nearby orphanage was opened to provide refuge for dozens of unwanted babies of prostitutes and their German clients. Sex could be purchased for as little as 5 euros — the price of a few beers in Dresden — drawing a daily influx of more than 1,000 sex tourists.

Today, more than three dozen brothels have been winnowed down to four; several were converted into goulash restaurants or golf clubs.

Petr Pipal, Dubi’s conservative mayor whose zero-tolerance policy was a key reason for the change, said that installing surveillance cameras and police officers at the entrance of brothels had deterred sex tourists. Rising prices for sex services and the global financial crisis, he added, were also helping to tame demand.

“Two or three years ago, we would get 1,000 men coming here for sex on a Friday night, which is a lot for a town of 8,000 people,” he said. “The one good thing about the economic crisis is that it is helping to keep sex tourists away.”

In Prague, even brothels in the most touristy areas complain they are suffering from economic hardship. On a recent night near Wenceslas Square in Prague, dozens of young men loitered outside a row of neon-lighted sex clubs, beckoning passing tourists with offers of complementary alcohol and racy strip shows.

Inside Darling, a multilevel cabaret famous for cancan shows modeled on the Moulin Rouge in Paris, young women gyrated on a stage, surrounded by leopard skin couches, flashing disco balls and paintings of naked women.

Suzana Brezinova, the club’s marketing director, said some high-spending businessmen still visited Darling to shrug off economic doldrums.

“People have less money,” she said. “But hard times also mean that people want to be cheered up.”

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