BERLIN - It's past midnight in downtown Berlin, and the prostitutes pace in front of the Hackescher Markt's stores. Signs of a slow economy are everywhere -- a sportswear store offers 40 percent markdowns, and bars advertise discounted drinks.

Like so many other businesses, Europe's largest legalized prostitution industry is having to adapt to the economic downturn. Customers are fewer or more frugal, competition has increased, and more clubs and brothels are offering discounts to drum up business.

Since late 2008, the number of English and American tourists has dropped and the street dynamic has changed, according to one prostitute in her mid-20s who requested anonymity because she did not want her family to know her profession. She still gets customers, she said, but they no longer pay for the extras.

"We have to be a lot more aggressive now," said the woman, wearing pink jeans and a black corset, who has worked the area for three years. "The customers used to come straight to you. Now they don't ask you as much."

Nevertheless, she said, the prostitutes in the area have been sticking to a set minimum price -- about euro80 ($110) for sex.

"If he doesn't pay our prices then he can't go home with me," she said, putting her hands on her hips. "That simple."

Prostitution is legal in Germany, with the same rights and benefits as other professions, such as health and unemployment insurance. There are about 450,000 prostitutes nationwide, according to 2008 numbers, with 10,000 in Berlin. Streetwalkers like those in the Hackescher Markt make up only about 3 per cent, with the remaining 97 per cent working in brothels, massage parlors or out of private residences.

Though the demand for prostitutes' services remains strong, the supply has increased as more people lose their jobs and turn to the profession, said Marion Detlefs, of the German prostitution advocacy group Hydra. The result is increased competition, she said.

In response, clubs and brothels are increasingly marketing themselves either as high-class, exclusive spas, or as bargain basements of delight.

The capital's biggest bordello, Artemis, is one of the former, with a wide variety of attractions. For an entry fee of euro80, guests gain access to a gym, free buffet, a pool and two erotic cinemas. The sex costs extra -- euro60 ($83) for 30 minutes, with set prices for a menagerie of other sexual services. On any given day, the bordello has 60 to 90 women working, said manager Vanessa Rahn.

Jenna, 30, a soft-spoken bottle blonde who works there, left a job in hotel hospitality to become a prostitute two years ago.

"It wasn't a very fun job, and I wanted to try something more interesting and fun," she said, requesting that her last name not be used.

Jenna said she hasn't seen a decrease in the number of her daily customers -- usually about 10 men -- but they have grown increasingly frugal. She also noted a drop in businessmen customers as fewer attend meetings at a nearby conference center.

"This is what the girls have been complaining about," Rahn said. "The number of customers is pretty much the same, but men only go once or twice to rooms, not three or four times, like before."

However, Artemis is working hard at bringing in customers through incentives such as discount cards and lowered prices for taxi drivers and senior citizens. The incentives have meant an increase in the number of regular customers, Rahn said.

At the other end of the spectrum is Berlin's Pussy Club bordello, which has branches in Heidelberg and Wuppertal.

It opened in mid-2008 with a focus on the discount-minded customer, offering an "all you can sex" flat-rate. For between euro70 and euro100, depending upon the time of day, customers can enjoy any sexual services with an unlimited number of women. For their work, the women are also paid a flat-rate wage.

"All the girls get a daily wage of euro100 to euro250 ($140 to $347), so they don't have to worry about money, which is good in this working atmosphere," manager Patricia Floreiou said in an e-mailed reply to questions. She noted a steady increase in applications since the Pussy Club's opening, attributing this in part to the bordello's flat-rate salary. "Many women in other clubs aren't earning enough anymore, and we offer steady, secure money."

Floreiou said the pricing structure has helped the bordello avoid any problems, despite the global market downturn, and that the number of customers has not gone down.

Back in Hackescher Markt, the American-German prostitute said she was thinking of a change in location, as she bent down to retie the laces on knee-high black patent leather boots with five-inch platform heels. She is planning to head soon to the U.S. to work in East Coast strip clubs, saying there was still ample work there, as well.

"I make more in one night just dancing than on the streets here," she said.

Artemis' Jenna, meanwhile, said she will eventually return to the quieter life working for hotels, but that she is in no rush to leave the high pay and dependability of prostitution.

"This type of job will always be in existence," she said. "People will always have money for fun."