Eugenio Garcia, a third-generation restaurant owner, measures the intensity of Spain’s economic crisis in precise terms: sales of cold tubos of beer and tapas like quail eggs and chorizo, or pork loin in whiskey sauce.

People who once spent 14 euros on a meal, about $16, are now spending 10 at his popular Taberna Coloniales, he said. His regular customers are vanishing to chase construction and architecture jobs in Dubai. He counts a toll of 25 restaurant closures in the historic quarter near the Church of San Pedro, where his oldest tavern has been for 14 years. He sold one of the other two restaurants he owns after watching the number of customers dwindle. “Before, people would order a bottle of wine and now they don’t," he said. “They drink less, eat less. The atmosphere for everyone is really pessimistic. We have passed through almost four years of crisis. Right now it’s like a ship in a tempest. You can only grab the mast and wait for what happens.”

Spain may be revered as the home of gastro chic, yet its hospitality industry is reeling, in a country with the highest unemployment rate in Europe (24 per cent), where the budgetary shortfall has recently forced the government to raise taxes, threatening to erode further consumption. Those forces are battering restaurants, from high-volume taverns like Garcia’s to upscale dining rooms that once catered to bankers and politicians.

Their chief rival is now a home-cooked meal; to compete with dinner parties, some owners are inviting diners to bring their own wine. Restaurants are changing menus, cutting prices and reducing portions. And customers are noticing inventive new charges for extra ice or tap water served in a pitcher. Even some of the very best restaurants are giving up Michelin stars to offer lower-cost alternatives, from trattoria fare to standard hotel cuisine. This summer, a number of trendy outposts are remodeling to create a casual look, fearing that if they don’t change, they will not last.

Long a country with an almost unmatched restaurant and bar culture, Spain is confronting a challenge in its kitchens that could threaten its role as a leader in global cuisine and its place on international lists of top restaurants.

In the last few months, David Muñoz , a prominent Madrid chef and the owner of DiverXO, which has two Michelin stars, has sought to start a debate about the future of Spain’s haute cuisine, questioning whether his country can maintain its creative momentum, and contending that Spaniards don’t appreciate the cultural treasure of its best gastronomy.

Ferran Adrià , a celebrated chef who helped transform Spain from a culinary backwater, insists that the best restaurants are shielded from the downturn. “I think the really good restaurants aren’t anywhere near closing, but the ones that do are those probably run by businessmen who didn’t really know much about gastronomy, but got tempted to join the bandwagon,” Adrià said. “Crisis or not, you’ve never eaten as well as now in Spain, and we’re certainly a long way from collecting all the fruits of 20 years of very hard work.”

But even one of Adrià’s favourites, the Madrid mainstay Sula, is remodeling to keep its customers. Perched in the trendy Salamanca neighbourhood, the restaurant was known for its deluxe “Ham and Champ” tastings of artisanal ham, Joselito Gran Reserva, and Dom Pérignon Champagne. Recently, Sula started offering cava, Spain’s version of sparkling wine, as a cheaper alternative. The owners are overhauling the restaurant at a cost of 400,000 euros to convert the ground floor into a tapas bar and to create space for private corporate diners.

“Nobody can afford to take three hours to have a meal these days,” said José Gómez , an owner of Sula. “If you don’t invest money in making this kind of overhaul, you risk being on your way out of business.”

The worst year for the industry was 2009, when 5,000 restaurants and bars closed, according to an annual market report issued this year by the Nielsen Company in Spain. But the disappearance of restaurants has continued with the relentless force of La Crisis: 4,000 in 2010 and 3,000 in 2011, reducing the total to 220,000, the lowest number since 1997.

Late last week, Lucas López and his partner were the only diners at a Madrid restaurant, Mikacho. The couple used to eat out six nights a week, he said, but now they have cut back to two. “There is no longer anything spontaneous about how much is spent and how often we go to a restaurant,” said López , himself a manager of a restaurant, La Mordida. “There is a mortgage and other things that can’t be ignored.”

Alejandra Ansón , who runs Elite Gourmet, a company promoting Spanish delicacies like cured merina sheep’s cheese, said that Spaniards were flocking instead to delicatessens so they could entertain at home. “There is a generation of new chefs who probably thought they could almost automatically become the next Adrià , but who instead must first learn how to make the best tortilla.”