The Palace of Versailles is preparing plans for two hotels on its sprawling grounds. One will turn a crumbling 17th-century treasury building into a luxury preserve of $950-a-night suites painted in Marie Antoinette’s favourite pastels: dusky rose and blue.

And at the Ara Pacis Museum in Rome, shiny new Dany electric cars were parked recently on both sides of the marble altar of peace commissioned by the Roman emperor Augustus after an Italian businessman paid nearly $110,000 for a sponsorship.

European museums are reeling from culture shock these days. Long reliant on government subsidies, they avoided the lay-offs, salary cuts and ticket increases that struck American museums hard in 2009, when the endowments upon which they depend plunged with the financial crisis. But now, European arts institutions are facing a squeeze too: government subsidies are falling and corporate donations have dwindled as the economic crisis spreads. The combination is forcing even the grandest museums to seek new revenue sources.

Some of the money-raising strategies are rather declassé for bastions of high culture, to the consternation of some in the arts world. In the Netherlands, the government will reduce arts spending by 20 per cent — $269 million — over the next four years. The culture ministry has said that visitor head counts will be a factor in determining which institutions get money. In Madrid, the Reina Sofia Museum of National Art is getting a price break on utility bills in exchange for publicity for electric companies.

Major museums are raising ticket prices and reducing staff, prompting employee unions to warn that museum hours may have to be reduced as cutbacks set in.
The Louvre, the most visited museum in the world with more then 8.5 million visitors annually, raised ticket prices to $13.50 from about $12.80 this year and is evaluating proposals, among them licensing its name to the Swiss luxury watch manufacturer Breguet.

Such aggressive commercial measures once made curators uneasy, said Catherine Sueur, deputy general administrator for the Louvre. “They were used to subsidies,” she said. “Today the psychology has changed.”

The Louvre’s state subsidy shrank from 75 per cent of its budget in 2001 to just over half of its $340 million budget last year. A new 5 per cent cut is looming for almost 500 French cultural institutions.

Critics of the hat-in-hand approach have been quieter lately, although there are still flashes of resistance. Many object, particularly to huge advertisements. Ads along the Doge’s Palace in Venice provoked an international petition drive in the summer, supported by prominent architects and some museum directors in Britain and the United States who contended, “They hit you in the eye and ruin your experience of one of the beautiful creations.”

Upkeep of centuries-old buildings is an enormous drain for European institutions like the Château de Versailles, which is developing hotels and seeking to license its name for luxury watches and other products. Recently, it opened an online boutique with offerings including a gold-and-ivory porcelain Marie Antoinette soup tureen and ‘Let Them Eat Cake’ coconut candles.

Jean-Jacques Aillagon, president of the Château de Versailles, said: “All of the money is invested in renovation, restoration, acquisitions and the organisation of exhibitions. The result of our search for new resources is not to earn more money for money’s sake. It is to invest in our heritage, which is an enormous, costly responsibility.”

Museums are also raising money by sending masterworks on global tours. World-class institutions like the Louvre and the Metropolitan Museum in New York used to swap paintings at no cost but now charge fees and prospect more aggressively for alliances with foreign museums. Some French institutions have sent out travelling exhibitions, essentially renting entire shows to eager regional museums in the United States and Asia — risking, some curators warn, wear and tear on masterpieces.

The Pompidou Center, which earned $1.9 million from travelling exhibitions last year, hopes to double that in 2012. The Musée d’Orsay sent Impressionist works on a three-year tour to San Francisco, Madrid and Nashville (where the tour is now), a trip it expects to yield more than $13 million. “It’s a way to finance our reconstruction,” said Amélie Hardivillier, a spokeswoman for the Musée d’Orsay.

Jean-Michel Tobelem, director of the French research institution Option Culture, said the itinerant circuit for fine art posed thorny questions about sharing masterpieces only with rich museums. “There is a risk,” he said, “that one day state authorities will say to museums, we are cutting your subsidies because you can rent your artworks or you can even sell your artworks to raise additional revenue.”

And so the open-air advertising proliferates. It’s one way to fill the gap, however jarring it may be on a picture-postcard skyline. In Paris, besides the Chanel ad, giant posters touting Yves Saint Laurent perfume, Ralph Lauren, Air France and H&M clothing have appeared in the last few months on the facades of the Musée d’Orsay and the Palais Garnier opera house.

But the museums insist there are limits. “We refused a bottle of Coca-Cola,” Hardivillier of the Orsay said, declining to reveal the fees paid by advertisers. “The flacon of Chanel is beautiful because it is made in three dimensions and moves with the wind.”