PUNTA DEL ESTE, Uruguay — For many well-to-do Argentines and other monied South Americans the height of summertime in the Southern Hemisphere means one thing: time to head to the beach.

And for decades, the beaches of choice have been those gathered along this posh Atlantic peninsula, known among South America's jetset simply as "Punta," and long considered the region's summer playground for the rich and famous.

For three high-rolling months — from December to March — the white, sandy beaches here are overrun with models, stars and business tycoons, transforming this town into a Latin version of France's Monaco or the Hamptons of New York.

But Uruguayan businessmen say this year's glitter is being dulled because of a grinding two-year recession in neighboring Argentina. And concerns of a second sluggish year here have prompted fears this tony resort's future may rest in something decidedly more downscale.

"There is no doubt Punta is changing," says Jose Rodriguez Leguisamo, manager of the Colonial-style Palace Hotel, where prices have dropped some 20 percent since the season's outset. "The days of free-spending in Punta have ended."

Thriftiness in Punta was in full view during a recent weekend: Throngs of people packed steak houses offering discounted menus of steak and Uruguayan hamburgers known as chivitos while upscale restaurants sat half-empty.

Even more telling are the handful of "For Rent" signs that have cropped up along Punta's fashionable Gorlero Avenue, near the high-end boutiques of Versace, Gucci and Tommy Hilfiger.

"People aren't vacationing here like they used to," complains Nelson Perez, manager of the Vaizer realty agency, where luxurious beachfront homes can rent for upwards of $30,000 a month.

In fact, those days have been dwindling for years, after Argentina's economy first slumped in the wake of the 1994 Mexican currency crisis. It's been touch-and-go in Punta ever since, as the Argentine economy has limped along, lashed by one economic crisis after another.

This year, real estate agents in Punta are particularly distraught, complaining of having to shave prices on premium rental properties by some 20 percent. And hotel operators like Leguisamo have moved to drop prices by as much as 50 percent this month amid worries prices might plummet to their lowest in a decade.

The spending patterns in part reflect a larger change at hand for Argentine families who in years past vacationed for a month or more. Now taking shorter vacations, Argentines armed with their dollar-pegged pesos are preferring destinations in Europe, the United States and Brazil.

It was during the 1950s that the palm-lined beaches in Punta first gained fame as the Argentine elite's summer haunt. Hoping to avoid the hoi polloi being urged to frequent Argentine beach resorts built up and promoted by then President Juan Peron, the wealthy instead retreated to Punta.

But as the tourism dollars slacked off in recent years, Punta businessmen accustomed to living year-round on their three-month-earnings have increasingly sought to attract the middle-class. The move has irritated some of the wealthy, who've sold off their properties and moved to secluded beaches farther north.

"We no longer want to be seen as a place just for the elite," says Leguisamo. "But we'd still somehow like to maintain that image."

To keep up that profile, Punta promoters in recent years have flown in a host of stars, including Catherine Deneuve, Antonio Banderas, Tony Curtis and Pamela Anderson. That helped raised Punta's profile, with Argentines again flocking to rub shoulders with the famous — and not-so-famous.

To be sure, the pageantry that is Punta has been on full display this summer. For the jet set, this is, after all, THE place to be photographed by ever important gossip mags either strolling the beaches with their latest love interest or relaxing poolside in their multimillion dollar beach houses.

Punta even got an extra boon of publicity this year after Uruguayan officials announced they would now allow topless sunbathing. Aside from a few models, the move didn't really catch on, although it did help generate a media frenzy in Argentina — and perhaps a few extra male visitors to Punta.

Keeping a watchful eye out over a beach, Daniel Ortiz, a 26-year-old lifeguard, said the topless issue had been a hot topic all summer long. Given the situation in Punta, he said: "We'll take all the publicity we can get."