When the seventh annual Art Basel Miami Beach opens Thursday, AXA Art Insurance Corp. will host tours, dinners and a $25,000 artist award with the upbeat theme “The Thrill of Collecting” — in the same week U.S. officials announced that the country entered a recession last December.

While the world’s flashiest art fair tries to put on a brave face, the grim financial picture worldwide has cast a pall over the festivities and sales prospects. The fair’s main sponsor, Swiss bank UBS AG, has recorded about $50 billion in writedowns and losses.

“The world is a truly frightening place,” said Howard Rachofsky, a retired hedge-fund manager and Dallas-based art collector. “There’s collective anxiety, and except for those who are truly obsessed, the idea of going on an art-shopping trip doesn’t appeal.”

Held at the Miami Beach Convention Center, the event is the largest annual U.S. contemporary-art fair, with 250 exhibitors from 33 countries showcasing more than 2,000 artists. Booth rental and other expenses can push the cost of exhibiting above $100,000. Smaller fairs surround the main event.

Miami Basel follows a dicey season. Weak sales rattled contemporary-art exhibitors in October at London’s Frieze Art Fair. At November’s New York art auctions, prices plunged as much as 50 percent. Visiting dealers are counting on die-hards like Rachofsky to keep the contemporary-art market moving.

Quiet Chelsea

“Chelsea is really quiet,” said New York dealer Andrea Meislin, who is exhibiting at the smaller Art Miami fair. Manhattan’s Chelsea district is the U.S. mecca for contemporary art. Dealer James Fuentes, who is also based in New York and has a stand at the younger New Art Dealers Alliance fair, said: “Overnight in September we lost half the clients we regularly talk to.”

It’s unclear whether Miami will be an improvement. Unlike previous years, hotel rooms are still available in the wealthy South Beach district.

At the same time, veteran collectors say a weak economy has benefits. “We did a lot of quality buying in the early 1990s,” said Miami luxury car dealer Norman Braman, who heads the fair’s host committee. The early 1990s included the U.S. recession of 1990-91.

“For people who have money — and a lot of people still have money — this is a great time to buy art,” said fair co- director Marc Spiegler, with less competition, less waiting for hot artists to be available. “For a lot of people, the frenzied market was a little off-putting.”

Moderate Prices

“We’re bringing more moderately priced things,” said San Francisco gallerist Gretchen Berggruen, who will present works by Kiki Smith, Martin Puryear and David Bates, with prices ranging from $2,500 to $750,000. “We’ve priced things to be attractive, and in some cases, they are less than they would have been last year.”

Recession or not, there are plenty of parties and corporate sponsorships, as well as the 18 satellite fairs across Miami. HSBC Private Bank is among sponsors of the Design Miami/Basel, and BlackRock Inc. is sponsoring the less edgy Art Miami Fair.

Dinners and boozy soirees are planned by yacht broker Edmiston & Co., the ritzy Caribbean vacation spot Dellis Cay, and Cartier. Unlikely product placements include a beachside breakfast for Moncler SpA parkas and the screening of a Che Guevara biopic.

‘Make or Break’

For dealers at the satellite fairs, who are younger and less capitalized than those at the main event, stakes are high.

“It’s make or break time for a lot of people,” said Fuentes. “A poor performance in Miami could put many galleries out of business.” Fuentes’s NADA offerings start around $500 for Alejandro Cardenas’s delicate drawings.

Fuentes negotiated discounts with art shippers and installers and had frank discussions with his artists. “We have to be open and flexible,” he said. “It’s just a matter of rolling with the punches and trying to figure out solutions. I’m just crossing my fingers. I hope it’s going to be OK.”

Last year, fair organizers reported 43,000 visitors. There are no estimates yet for attendance this year.

Lindsay Pollock