Aug. 29 (Bloomberg) -- Zurich’s red-light district is dimming. Bankers who have been core patrons of the city’s sex industry and cabarets are curbing spending.
The venues of Langstrasse -- or long street -- are closing, replaced by hipster bars, techno clubs and even a backpackers’ hostel. Like the finance industry, the sex trade has opted for a lower profile.
“Times have changed,” said Kevin Joliat, the manager of the Petit Prince nightclub in central Zurich. “Bankers really have to show who the client was, why they spent the money and was it really necessary,” said Joliat, who once worked at Zuercher Kantonalbank, Switzerland’s largest state-owned bank.
The decline of erotic entertainment highlights a changing culture in Zurich as banking jobs ebb and public opinion turns against inflated bonuses. That and smaller budgets for entertaining customers have deprived the clubs and bars of a key customer base.
Bank rules on expenses have become stricter, said Balz Stueckelberger, head of the Employers Association of Banks in Switzerland, which is based in Basel.
“People use a more targeted approach now, with more processes and rules,” he said. “Nightclubs don’t feature in those.”
While police in New York cleaned up Times Square and London’s real-estate boom overwhelmed the Soho district, Zurich’s red-light district has been hit also by the fallout of the 2008 banking bust. That’s when UBS AG, Switzerland’s biggest bank, was bailed out by taxpayers. Since 2009, the number of full-time financial-services employees in Switzerland has dropped by 6,000 to 105,000, Swiss National Bank statistics show. Banking’s share of the national economy has also declined, according to researcher BAK Basel.
Street prostitution is allowed in the city at stipulated times and areas. Every sex worker requires a police permit, according to a city-issued prostitutes handbook.
From a peak of 252 brothels in 2011, there were 160 at the end of 2013, said Judith Hoedl, a police spokeswoman. The number of prostitutes arriving in Zurich fell last year for the first time since at least 2010, she said.
Restaurateurs are feeling the pinch, too.
Bankers -- who once ordered a la carte, drank wine, cognac or grappa and tipped generously -- now often opt for mineral water and set-price menus, said Sepp Wimmer, who runs the Zunfthaus zur Waag restaurant, about 50 meters from Paradeplatz, the heart of Zurich’s banking district.
“People go all-out less than before,” he said.
The Langstars backpackers hostel, which opened in 2011, highlights the changing face of Langstrasse. Flanked by strip clubs and brothels, the hostel’s bar offers live music catering to young travelers.
Langstrasse is just under a mile long in a traditionally working-class area that borders tracks running into the central rail station. Soldiers from a nearby army barracks that closed in the 1980s had helped brothels and strip clubs flourish; they were supplemented by bankers during the boom years.
Surging drug use prompted a clean-up that began in 2000 and included zero tolerance of dealing in public or private courtyards, and greater oversight of sex businesses.
“Just while standing here we would have been asked several times if we wanted to buy something and there probably would have been someone sitting right here, shooting heroin,” said Alexandra Heeb, a police official, gesturing toward a wall opposite Restaurant Sonne, one of Langstrasse’s most established meeting places for escorts and their clients.
The exotic dancers at the Night2000 Cabaret say clients aren’t throwing money around like they once did.
“It’s hard work; you always have to negotiate,” said Jenny, a 38-year-old Thai dancer in a black halter-top dress. “A couple of years ago it was big bucks,” she said, with patrons buying champagne starting at 390 francs ($430) a bottle.
In addition to declining patronage by bankers, Zurich’s cabarets -- basically strip clubs -- have been closing because of higher costs compared to Germany and France and competition from so-called sauna clubs, said Maurus Ebneter, a spokesman for Asco, an association of Swiss cabarets. Sauna clubs are large, out-of-town brothels that charge an entry fee for access to pools, showers and saunas in addition to the cost of engaging the sex worker.
To move prostitution away from residential areas, the city tested sexboxes -- where garages are adjacent to small cabins -- in a desolate industrial area in August 2013. The experiment was deemed a success, city officials reported this month, though prostitutes earned less because they were removed from the nightlife of the center.
While all that has lured away a chunk of the client base for cabarets, Ebneter says they’ll continue to be in demand.
“I’m convinced that there is still place in Switzerland for a couple of dozen cabarets,” said Ebneter. “Who goes to a sauna club with his business customers?”
Joliat, Petit Prince’s manager, said his club targets well-heeled older clients: bankers, lawyers and entrepreneurs. Anonymity is highly valued. Petit Prince has a selective door policy for escorts, letting in those who are nicely dressed and friendly, he said.
“No one has to know what they are doing,” said Joliat. “What goes on inside, stays inside.”