LONDON BRIEFING:POSTERS ADVERTISING the musical version of the 1990 Hollywood blockbuster, Ghost, have been plastered around the London underground for months. But, despite the show's impressive special effects, ticket sales have been disappointing and its run at the Piccadilly Theatre will come to an end in two months' time.

Other West End productions fear the same fate, as the much-vaunted Olympic boost to business in the capital has failed to materialise. Games venues around the capital are busy enough, but central London looked eerily like a ghost town this week, as tourists and locals steered well clear of the usual shopping and leisure hotspots.

The black cabbies are complaining, of course, and far from raking in the takings, London’s hotels, shops, theatres, museums and other visitor attractions have also seen trade plummet over the past 10 days, with some restaurants reporting a slump of as much as 70 per cent.

“We’re bleeding, darling,” theatre owner Nica Burns told the Financial Times, in suitably dramatic style. Burns runs the Nimax Theatre company, which takes in West End playhouses including the Apollo, the Garrick and the Lyric. Last week was the worst this year for Nimax: “I think the Olympics are great but I feel like I’ve been the bulls-eye for the archery,” she said.

While 100,000 overseas tourists are estimated to have flooded into London for the Games, the influx of foreign visitors in a normal year would be three times greater than that. But traditional tourists have been deterred by the dire warnings of transport chaos and hideous overcrowding during the Games. Many Londoners too have chosen to flee the capital for holidays abroad during the Olympics, while large numbers are working from the comfort of their own homes.

Figures from the research group Experian showed a drop of 10.4 per cent in footfall on a year ago at shops in central London last Friday, and an 11.7 per cent fall on Saturday, although that is likely to have partly reflected the lie-ins enjoyed by shoppers after staying up late for Friday’s opening ceremony.

It all makes for a miserable time for London’s shopkeepers, who have already taken a huge hit from the wettest June on record. On Monday, the Confederation of British Industry said retail sales in July had been much weaker than expected and warned of few signs of August bringing any relief.

Businesses have turned their anger on Transport for London, which oversees the tube network and which mounted a huge campaign to warn of the impending pressures on the transport system. Apocalyptic warnings were broadcast to commuters ahead of the Games, urging them to stay away or to walk to work instead. The warnings worked too well, it seems. Mayor Boris Johnson, who made one of the recordings, is also under fire – his tongue-in-cheek claim on Monday that tattoo parlours were enjoying a boost to business (“Plenty of people seem to want their thighs inscribed with ‘Oylimpics 2012’ and other ineradicable mis-spellings”) did not amuse businesses seeing their trade fall.

There were some wild over-estimates earlier this year of the extent of the Olympic boost, but the warning signs were there – thousands of Londoners who had hoped to make a killing by renting out their homes found no takers and hotels that hiked their prices now see themselves half-full in what should be their busiest, most-lucrative time of the year.

It’s not all bad news, of course. The great stay-away means that London’s creaking transport system has not collapsed. And the huge Westfield mall on the Olympic site in Stratford is packed with people on their way to and from the Games, along with thousands who don’t have tickets but are there to soak up the atmosphere – and to shop.

Longer term, the boost to the UK economy from the Olympics has been put as high as £13 billion and the worldwide television coverage of the opening ceremony should certainly help attract visitors in the years ahead. That will be of little immediate comfort to the shops and restaurants of the West End suffering now but it could pay dividends in the future.

Meanwhile, many Londoners are taking advantage of the unexpected lull by booking tables at top restaurants that would normally be packed out or by taking a stroll around Covent Garden without being crushed by the crowds.

Fiona Walsh writes for the Guardian newspaper in London