"There's no denying the crisis. It affects the whole country, and Madrid's bars and nightclubs are no exception," said Dani Marin, joint owner of Costello, one of the city centre's hundreds of drinking establishments.
On a Friday night around Christmas, its basement throbs with live rock music, while upstairs drinkers chat leaning on the bar to the mellower rhythms of a DJ.
It is a typical bar scene in a country devoted to partying out on the town — but people in the business say Spaniards are spending less on that pastime.
"Consumption has fallen a lot," said Marin. "Sometimes the bar still gets as busy and lively as it was six years ago, but overall our revenues are down by about half."
People listen to a concert at the Costello Club in Madrid on December 5th. Photo: APF
After the death of longtime dictator Francisco Franco in 1975 the Spanish capital responded to the country's newfound freedom with an explosion in creativity in theatre, music and nightlife dubbed "La Movida Madrilena", which loosely translates as the Madrid scene.
Times have changed, however. The economic crisis that erupted in 2008 due to the collapse of a decade-long property bubble altered things.
"Madrid used to be a city like Berlin or London are now, full of opportunities. It used to have more on offer," said one bar-goer, Juan Cañadas, strolling in Madrid's trendy Malasana district. "It has lost a bit of its magic."
The crisis drove up unemployment to a current rate of 24 percent and prompted tough economic austerity measures by the conservative government.
These included raising sales tax from eight to 21 percent in 2012, which has cramped consumption.
"I love Madrid. At our age you find everything you want," said another festive local, Quiara López, a student of 20, out for a night on the town with a friend.
"You have all kinds of places to go and you can do what you want. But you have to watch what you spend."
With 75,000 people working in them, Madrid's bars, casinos, theatres, restaurants and nightclubs are crucial for the region.
They generate up to €7.5 billion ($9.1 billion) in revenues a year, about 4.7 percent of the region's economy, according to some estimates.
The decline in nightlife has erased nearly one percentage point from the region's output, said Vicente Pizcueta, spokesman for a Madrid leisure business association.
The drop in business is striking.
"Thursday used to be like part of the weekend," with the bars packed, said Marin. "Now it is just another day of the week. That is the most remarkable change we have seen."
Madrid city hall insists it is working to support restaurants and bars, which it says are two of its main tourist draws.
With fewer drinkers coming out to play, bar owners are adapting to survive.
"We have been reinventing ourselves, doing all sorts of things," German Hughes, manager of the La Palma cafe, which has been open for 20 years.
"We used to have three concerts here a week. Now we have five, plus two book launches and a play. We are putting on more activities so that people have more incentives to come."
After six hard years, figures suggest that consumer spending is slowly taking off again in Spain. As the economy gradually heats back up, bar owners hope this city's nightlife will do the same.
"Madrid has changed enormously since the Movida," said Hughes. "But we who work in nightlife are continuing to fight. We continue to believe that like everything in life, this is part of a cycle that soon will turn better."
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