Monaco’s reputation as the planet’s playground for the uber-rich and famous is epitomized during the Formula One Monaco Grand Prix, an ultra-glam event that traditionally overlaps the Cannes Film Festival.

The principality was branded as glamorous even before Grace Kelly married Monaco’s monarch Prince Rainier in 1956 and James Bond introduced the masses to black-tie casinos. Images associated with Monaco include bronzed supermodels, dashing international tycoons, $100,000 sports cars, Dior and Vuitton shopping sprees and decadent yacht parties.

But during a global recession, how does Monaco market its lure of gilded revelry to a planet in fear of going broke?

“Here we call it a challenging economy,” says Michel Bouquier, director of the Monaco Tourism and Convention Board. “Monaco is actually doing pretty well. The recent Monte Carlo Rolex Masters tennis tournament sold 8,000 additional seats over last year. That is a very, very good sign.”

For this year’s Grand Prix on May 24, there’s a marked change in booking patterns for luxury hotels, yachts, villas, etc. “People are booking later and later,” says Bouquier. “But we are adapting. We have to be competitive.”

But make no mistake — competitive doesn’t translate into a fire sale. “We will never promote a discount Monaco,” says Bouquier. Companies may offer added amenities, but the only formal plan to address the global economic downturn is to maintain 2008 prices for 2009.

Luca Virgilio, general manager of Hotel Metropole, agrees. “People this year are waiting to commit, hoping that they’ll get a last-minute deal. But for Formula One we’re always going to be very, very busy. Once we decide on the price, it’s going to stay the same.”

It’s corporate bookings that have changed dramatically, everyone agrees. Robert Shepherd, Edminston Yacht Co.’s director of charter for the Americas, says: “In the past, companies chartered a yacht for the Monaco Grand Prix. But a corporation isn’t so quick to spend that kind of money after it’s laid off dozens of people.”

Yet, prices during the Grand Prix are still astronomical. For instance, local residents and businesses often rent out their balconies overlooking the Grand Prix city track for around $100,000, says Virgilio. Virgilio’s terrace hotel restaurants sell A Day at the Races package for E1,800 ($2,408), can hold more than 250 people — and are almost sold out.

A place like top nightclub Jimmy’z is known to raise the price for a beer to $90 for the Grand Prix, and people don’t see that changing.

“Just last week, when I went to lunch with some friends in Monte Carlo, the bill was something like e500 per person for a table of 10 — a lot of money for ordinary food,” says Jon Acevski, who owns luxury rental property Chateau Saint Jeannet near Nice (see related story, page A13).

Bernard Lambert, CEO for Monte-Carlo SBM, the company that multiple hotel, casino and other properties, doesn’t mention food or beverage discounts either but notes that “gamblers will be scarcer in terms of money left on the tables, but slot machines will perform to the tune of 2008.”

The Monaco Grand Prix has been around since 1929 “and is probably about the most attractive event in the world,” Bouquier says. “People come here because they know that their couple of days at the Grand Prix will be an experience they’ll remember all their life — so it will be money well spent.”

Memorable, yes. Well spent, that’s debatable. “The Monaco Grand Prix is very, very social and very entertaining, but you also go for the races,” Virgilio says. “You see all of these crazy fast running cars on the streets making hairpin turns where yesterday you could drive on your moped.”

In short, it’s an exciting race in an over-the-top town where, even in a recession, people are willing to pay a small fortune for a fleeting, fantastical visit.