At first, it feels like you are in a high-security enclave. High barricades bookend the infamous Herbertstrasse, sometimes called the 'street of shame'. Then, women perched comfortably on swivel chairs come into view, dressed in nothing but stockings and suspenders, looking out from narrow shop windows. Some stick their necks out, to lure passers-by to come in or to hurl invective at tourists trying to cheekily snap a picture. Well known for its tacky sex shops, strip joints, bordellos and casinos, the Reeperbahn in Hamburg's St Pauli district is one of the world's oldest and most famous red-light districts. Once a favourite hangout for fatigued sailors from ships that anchored at Hamburg's port, it began to draw hordes of tourists from throughout the world. But now prostitution is slowly dying in the Reeperbahn - also known as die sundige Meile in German or 'the sinful mile' - which struggles to find a balance between tradition and modernity. The sex industry is in a terminal decline as prostitution flourishes through more modern ways - mainly through the internet, a medium that is considered both discreet and safe. On April 1, Hotel Luxor, the Reeperbahn's oldest brothel located on a narrow side street called Grosse Freiheit, shut its doors for good. Waltraud Mehrer, a blond-haired petite woman who was Luxor's madam for more than two decades, sighs at the economic imperatives which have closed it down. 'It's a sad development,' she says. 'You just can't make enough money in the Reeperbahn anymore. Private call-girl services and internet sex ate into our business.' In the 1970s, when the Luxor did brisk business, it was a 24- hour-a-day operation. But in the months leading up to its closure, it was barely open for four nights a week. Many other brothels in the area are in a similar predicament. The Reeperbahn's famous, multi-storey Eros Centre brothel, was once the biggest in Europe. An Aids scare forced it to close in 1988, only to resume trade a few years later in a much smaller building. Today, its dank, neon-lit corridors lead customers to a host of Eastern European and Russian women. The Reeperbahn is considered by many of Hamburg's denizens as an indispensable part of the city's rich cultural identity. In the early 1960s, before they became famous, the Beatles performed in several clubs in the area, like Kaiserkeller, Star-Club, and Top Ten. Stories of their on-stage antics still can be heard from locals. On a dare, John Lennon is said to have played a song set in his underwear, while George Harrison played with a toilet seat around his neck. In its heyday, St Pauli was home to more than 1,000 prostitutes. Today, fewer than half that number ply their trade there. It has become a hotbed of violent crime. Lately, there's been a surge in teenage binge drinkers, and an alarming rise in street crimes due to pimp rivalries. There are more than 200 such incidents reported every month at David Wache, the local police station. Close to half of the perpetrators are teenagers. In 2006, 10 members of the Marek Gang, which controls brothels on and near the Reeperbahn, were charged with pimping in a large trial. The judge handed out suspended sentences. The men had started relationships with young women in local discos in order to recruit them to work in their brothels, and this is illegal if the women are under 21. Some of the women had also been abused. To curb violence, local authorities installed a network of surveillance cameras in the area in 2005, but the crime barometer still kept rising. Last year, the Hamburg Senate imposed a comprehensive ban on weapons, including knives and - after 8pm - beer bottles, in the area. They are also mulling a blanket ban on alcohol being consumed in the area, though that might severely affect bar business. The Hamburg police this month set up a special commission called Rotlicht to tackle growing crime in the area. The main strategy to spruce up security in the area is to increase the number of policemen stationed at David Wache. Just last week, in a massive crackdown, 80 policemen raided three brothels late at night in the Reeperbahn. Fifty-one prostitutes operating without local authorisation were arrested in the operation, from brothels like Night Life and Galerie. 'There will be more raids,' warns Alexandra Klein, a dour-faced and stern officer from the Hamburg police force who heads Rotlicht. 'We intend to make life hard for any potential mischief makers in the area.' Local sex touts privately complain that the massive police presence is hindering their already slack business. 'My business has gone down by three times,' a local tout, who gave his name as Edward, says, grimacing as Frankie Valli's Can't Take My Eyes off of You blasts from a table-dance club close by. He works as a middleman for a club called Table Dance Shop, located in the centre of St Pauli. 'These are bad times,' he says. Edward says a steady decline in the number of tourists visiting the Reeperbahn is really hurting business. He once was a flourishing middleman who supplied girls from Russia and Eastern Europe to various brothels in the Reeperbahn. But now, with declining customers, his share in commissions has plummeted. 'You shouldn't forget,' he says. 'If the brothels don't survive, no other business in the area will survive. They'll all be finished.' It's a view that resonates with Cornelius Littmann, an openly gay middle-aged businessman, who owns the FC St Pauli football club in Hamburg. Mr Littmann also owns the Schmidt Theatre, a theatre group which is centrally located in the Reeperbahn. Mr Littmann's businesses capitalise on the mad throng of crowds coming to see the Reeperbahn every day and particularly on weekends. He strongly believes that every attempt should be made to halt the neighbourhood's decline. 'I don't think the Reeperbahn can ever totally die or disappear, largely because of its unique identity,' he says. 'Its stature might diminish, but it can't completely go away.' 'Tourists visit Hamburg not just for its seagulls,' says Campbell Jeffereys, an Australian author and independent journalist, 'but also for its bawdy red light district'. Jeffereys has lived in the heart of the Reeperbahn, on a street called Hopfenstrasse, for the past four years. Near his house, a seductively cavorting woman in high leather boots can be seen inviting punters in for a spot of sado-masochism. Living amid the neon sleaze of this red light district hasn't been easy for Jeffereys. Visitors leave lewd graffiti on the walls of his apartment block. He often encounters shady visitors shooting up heroin just outside his apartment block. Then there are the noisy 4am brawls between pimps and drunken teenagers. Still, Jeffereys doesn't want the authorities to do away with the red light district - the feature that gives St Pauli its distinct character. But this view doesn't sit well with all. Not least with businessmen like Andreas Fraatz, a real estate magnate, who owns the Empire State hotel, a tall, shiny, and swanky glass building overlooking Hopfenstrasse. The hotel began operations just six months ago on a patch of land that once housed the Astra brewery, maker of a famous local beer. Mr Fraatz is also the man behind a Euro400 million (HK$4.88 billion) project that includes apartments for high-income earners. His office didn't respond to repeated requests for an interview. Many in the area, including Malina Morsdorf, the owner of a cafe called Mother's Fine, blame him above all for the decline of the Reeperbahn. 'His vicious attempts to gentrify the place will ruin St Pauli,' she warns. 'He obviously thinks of the prostitute houses as an eyesore. He wants to convert this cultural hub into an upmarket place for the rich.' Mr Fraatz is also blamed for steadily rising house rents in the area, which have led to closure of some bars in Hopfenstrasse. Call girls, who once occupied windows in the graffiti-plastered buildings on the street, also mysteriously disappeared 18 months ago, locals say. 'If you take the sex out of the Reeperbahn,' says Jeffereys, 'you will take away the soul of the Reeperbahn.'