Nov. 25 (Bloomberg) — The big empty space you’re likely to find behind Miami’s Delano Hotel is where UBS AG used to pitch carpeted tents and provide about 1,600 clients with two buffet dinners featuring lobster tails, caviar, raw oysters and an array of ice sculptures during Art Basel Miami Beach.

In keeping with the leaner times, UBS, Switzerland’s biggest bank by assets, has canceled what had become during the past three years the bank’s signature event at the annual art fair, which opens next week.

“We are being sensitive to the changing business conditions, so we’ve opted to not offer the same amount of hospitality as we have in previous years,” said Kelly Smith, UBS’s director of corporate communications. The bank will maintain its VIP lounge for clients, usually stocked with orchids and a lavish lunch buffet, and it will provide private client dinners instead of the tent extravaganza.

Art-world regulars aren’t surprised to learn that UBS, the fair’s main sponsor, and other backers are slashing costs and paring the party circuit.

“I don’t see this as a comment on Art Basel, but as a sign that they are trimming their sails in order to be seen as responsive to pressures from a variety of sources — their investors, their employees and the economic environment,” said New York art adviser and consultant Jay Cantor.

The bank lost $20 billion in 2008, Smith said. It reduced headcount that year by 14,800 through firings, retirements and people leaving the company, according to Smith, and aims to trim 4,000 jobs by similar means in 2010. It has also closed the art- banking division. Still, UBS will maintain its sponsorship.

‘Completely Committed’

“We remain completely committed to Art Basel and Art Basel Miami Beach and our other existing sponsorship partners,” Smith said.

UBS has sponsored the fair’s founding Swiss edition for 16 years. The Swiss bank has also been the top sponsor at Art Basel Miami Beach since that fair’s start in 2002. The fair includes 250 international art dealers from 33 countries.

Associate sponsor Cartier is forgoing the elaborate “dome” it built in the past near the Miami Beach Convention Center and used to present diamond necklaces and host lunches. The company will have a lounge inside the convention center along with the other sponsors.

Art insurer AXA Art, another associate sponsor, will host one party instead of the usual three. AXA has invited 75 to 100 collectors to a dinner at South Beach’s pricey Casa Casuarina, the former home of slain fashion designer Gianni Versace. AXA’s usual poolside dinner at the Shore Club for insurance brokers, curators and dealers is off, as is a breakfast.

“You always have to look at the bottom line and scale back,” said AXA’s spokeswoman Rosalind Joseph. “It’s not time to be tossing money around.”

This doesn’t mean the party is permanently over.

“We’ll take a look next year at the environment and see if it’s prudent to ramp back up activities,” Joseph said.