Berlin’s Watergate nightclub, one of the institutions of the German capital’s nightlife, is to close down after 22 years, with its owners saying the night-time economy still hasn’t recovered after the pandemic.

In a statement, the club’s management said it had made the “difficult decision” not to extend its lease and close its premises after a New Year’s Eve party at the end of the year.

In an interview with Berliner Zeitung newspaper, co-founder Ulrich Wombacher cited numerous reasons for the closure, including financial pressure brought by inflation and rising energy prices, a younger generation’s preference for outdoor rather than indoor music events, high wages commanded by top DJs, and a decrease in cheap flights bringing tourists to the city.

Watergate, which is located next to the Oberbaumbrücke bridge in Berlin’s Kreuzberg district and has a downstairs “Water Room” looking into the river Spree, was founded in 2002 by Wombacher, Steffen Hack and Niklas Eichstädt.

Originally specialising in drum’n’bass with the occasional hip-hop and R’n’B night, Watergate has over the years transformed into one of the city’s more upmarket venues, whose high-profile deep-house and techno DJs draw crowds from across Europe. This year, the club was voted at number 34 in DJ Mag’s Top 100 Clubs poll.

Speaking to Berliner Zeitung, Wambacher said while Berlin nightlife had initially bounced back from Covid-19 closures “for six to seven months”, the pandemic had brought about a more fundamental change in behaviour, with young people more likely to stay at home or splash out on a visit to a festival if they did want to experience live music.

“The average club-goer goes out for three or four years, then they are finished with their degree and the next generation comes along,” Wambacher said. “So two and a half years of club closures can make a difference.”

He also suggested that Berlin’s “poor but sexy” image had outlived its sell-by date and that a growing drug problem was making the city’s party district Kreuzberg less of a draw for tourists. “After Covid, Berlin’s attractiveness would have had to be redefined, but that didn’t happen.”

Watergate is the second Berlin night-time institution to announce its closure in the space of just over a month. In August, owners of nightclub Wilde Renate said they would cease trading in 2025 after 18 years, blaming a non-agreement over the terms of their lease with a Berlin property magnate.

Numerous clubs in the clubbing heartland around Ostkreuz station are also under threat by the planned extension of the A100 motorway.

But while many clubbers are urging Berlin’s centre-right senate to become more proactive in protecting its nightlife, Watergate co-founder Wombacher questioned the effectiveness of state subsidies.

“That’s not how club culture works,” he told Berliner Zeitung. “Club culture is fast and individual. You can’t force it into a planned economy.”