"We were born naked. None of us came here with clothes on to begin with. And it's so peaceful and relaxing," explained Joe Wagner of Orlando, Fla., sipping a beverage with his wife, Cindy, and three fellow nudists at a poolside table.

The Wagners first sampled the clothing-free lifestyle about a dozen years ago at Cypress Cove Nudist Resort & Spa in Kissimmee, Fla. Now, the couple lists Cocoa Beach's sole naturist establishment as a favorite destination.

"Look around," Cindy Wagner said, waving her arm at bare-skinned sunbathers around the pool. "You can be 100 pounds. You can be 500 pounds. No one cares."

After nearly going under as a struggling motel, Fawlty Towers reopened May 1 as a re-branded, clothing-optional resort. Now, manager David Broad says weekend business is brisk, and the no-clothes strategy has saved the 32-room facility from fiscal oblivion. It has also made it one of a growing number of resorts establishing nudist-friendly facilities as a way to weather the lingering economic downturn.

The American Association for Nude Recreation estimates that nude recreation has grown into a $440 million annual industry.

The changes are not without controversy. Two days after the grand re-opening of the Fawlty Towers, the Cocoa Beach City Commission ordered research on whether the facility ran afoul of hotel, health, alcohol or public-nudity regulations.

Debra Key, a Cocoa Beach resident who is involved in Girl Scouts, complained to commissioners that Fawlty Towers could corrupt children's minds and attract prostitution.

"It doesn't stay behind closed doors. The type of perversion that comes to these places — they bring the drugs along with it, the sexual promiscuity," Key told commissioners.

But City Attorney Skip Fowler later determined that Fawlty Towers is operating in legal fashion.

"My hat's off to them. They're trying something different," said Bob Morton, executive director of the Naturist Action Committee of Oshkosh, Wisc. This non-profit group fights for nudists' rights in communities across the USA.

"It may or may not work for them, but they'll make some adjustments and say, 'That's the best idea we've ever had' — or, 'That really stinks,'" Morton said. "You have to ask the Cocoa Beach city commissioners: Would they be happier to have the place shuttered with a 'For Sale' sign on the window?".

In a similar business-model switch, the shuttered Mira Vista Resort in Tucson, Ariz., reopened as a nudist facility in May 2006. The historic property formerly operated as a guest ranch, a shelter for abused women funded by Suzanne Somers, and a gay health spa before closing down in December 2005, said Suzanne Schell, co-owner.

"Had we just bought this place as a traditional hotel, we would not have lasted. It's lasted because we've got this nudist niche," said Schell, who also co-owns Laguna Del Sol Nudist Resort near Sacramento, Calif.

"We were born naked. None of us came here with clothes on to begin with. And it's so peaceful and relaxing"

Joe Wagner of Orlando, Fla.

"You've got a clientele of people around the country looking for nudist places to go to. It makes it a little more viable, and we've been able to survive a significant downturn in the hospitality industry better than a lot of properties," Schell said.

Near Silver City, N.M., the new owners of Faywood Hot Springs are constructing a 2-acre, clothing-optional campground to attract new guests. The resort, which features 13 geothermal mineral pools, reopened in February after being closed since 2007.

Campground construction may wrap up by early fall, said Damon Shirk, co-owner.

Not all naturist resorts are prospering amid poor economic conditions. Near Ithaca, N.Y., Bonita Nudist Retreat owners dropped their business model May 1 and reopened as Aspen Family Campground, a clothing-required facility.

Co-owner Annie Troeger said her struggling nudist resort could not compete with traditional, long-established campgrounds in the Finger Lakes region.

"Any other campground around the area, they're stocked with people. We're in a small town. Most people did not care a lot about naturists," Troeger said.

Troeger now plans to add more child-friendly activities and equipment at the 100-acre wooded site, which offers swimming, boating and fishing.

Broad hopes Fawlty Towers can capitalize on the clothing-optional cruise industry. In November, Royal Caribbean's Freedom of the Seas will offer a nudist cruise from nearby Port Canaveral that may attract nearly 4,000 passengers.