Venice's bohemian bar suffers from drop in 'quality tourists'

Their establishment is as much a part of the Venice myth as the canals, gondolas and the Rialto Bridge. But now last orders have come for the Cipriani family, who have run Harry's Bar in Venice for 81 years.

After three years' of mounting debts, bean counters are stepping in to take over the legendary watering hole where Orson Welles, Truman Capote and Noel Coward, sipped – or necked – its famous Bellini and dry martini cocktails. Even charging €20 (£16.26) a go for its cocktails has not been enough to save the bar from the grip of a seemingly endless recession. Judging from customers' comments on travel websites, the prices might have been part of the problem.

The banks have insisted on sending in Gianluca D'Avanzo and Salvatore Cerchione from Blue Skye Investment, a Luxembourg company, to overhaul the bar's organisation and cut costs in return for wiping out debts of nearly £5m.

Arrigo Cipriani, the 80-year-old son of the bar's founder Giuseppe, said he had tried several times to negotiate with the bar's 75 staff to alter working practices and cut wages. The staff, who account for 55 per cent of costs, say they are needed in such numbers to guarantee the establishment's famously attentive service. Suggestions of pay cuts and voluntary redundancy were met with strike action.

Mr Cipriani told Corriere Della Sera newspaper: "From 2008 to today we have seen a 20 to 30 per cent fall in our clientele. These days many day-trippers come to Venice, but not quality tourists. We cannot deny that we miss the Americans, who were a guaranteed clientele for the whole year, we are feeling that. And that is not compensated for by the new wave of rich Russians or Chinese."

In wresting control of the bar from the Cipriani family, the financial crisis has managed what even fascism and the Second World War failed to do. In the 1930s and 40s, unscrupulous rival bars and restaurants resorted to smear tactics to lure customers away. There were rumours that the bar, situated in a narrow passage off St Mark's Square, was a secret hangout for homosexuals and that conspiring Jews gathered there in defiance of the racist segregation laws.

But such rumours had little effect – and probably attracted much of its most Bohemian clientele, including Somerset Maugham, Peggy Guggenheim and Charlie Chaplin.

Many of the great and the good have graced the tables at Harry's Bar. Ernest Hemingway had his own table in the corner when he was a regular patron in 1949-1950 and made frequent reference to the Venice watering hole in his book, Across the River and into the Trees. Other famous patrons include Truman Capote, who enjoyed the bar's prawn sandwiches, and Orson Welles, who would knock back the Dom Perignon. According to a story on the Harry's Bar website, the Cubist visionary Georges Braque once, pleading poverty, offered a painting in exchange for food. The founder of Harry's Bar, Giusepple Cipriani, refused the painting butsaid: "I don't care if you don't have any money today, eat your fill and pay me when you do."