Olympic Games host city London struggles to strike economic gold

LONDON — Like so many proprietors across this host city, restaurateur Albert Siu could almost hear the cha-ching of Olympic gold. But almost a week into the Games of the XXX Olympiad , he stood amid empty tables at his eatery in the normally bustling West End theater district this week and asked the same question being posed by so many Londoners: Where have all the tourists gone?

Britain gambled $15 billion on hosting the Olympics, an investment being watched closely across crisis-battered Europe, where the debate over stimulus vs. austerity has reached a fevered pitch. But early evidence is suggesting just how hard it can be for modern host cities to cash in on the Games.

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Missteps at the 2012 Olympics: Olympics never have been perfect. But the London Games have had missteps and PR setbacks aplenty, from mixed-up national flags to counterfeit national uniforms to athletes banned for racist tweets and throwing matches.

The 2000 Summer Games brought an influx of international tourists who packed hotels across Sydney. But, like Athens and Beijing, which saw net declines in summer visitors in 2004 and 2008, respectively, the London Games have turned into a tale of two economies.

“We employed more staff because we were told millions of people were coming to London,” said Siu, 54, the manager of the Melanie Italian Restaurant, around the corner from the Palace Theater, which is staging the musical “Singin’ in the Rain.” “Now we’ve realized it’s not getting busy, and we’ll have to give them notice.”

On one hand, a thriving events-related market is chugging along near stadium sites in East London, Wimbledon and Greenwich, where businesses with captive audiences of ticket holders are reporting bang-up sales. But with non-Olympic visitors apparently scared away from one of the world’s largest tourist destinations by the talk of crowds and chaos — and with large numbers of Londoners opting to go on vacation or work from home during the Games — other parts of this typically thriving city of 8.1 million people have suddenly turned into ghost towns.

Traffic on roads in Central London is down 20 percent. London tour operators are reporting drops of 30 percent or more. At some of London’s hottest museums, the normally long entrance lines have disappeared. London’s famous Black Cab drivers are griping about a rare shortage of fares.

Luxury hotels tapped by Olympic organizers to provide rooms for the Games, as well as many of those near event sites, appear to be doing quite well. But some other one-to-four-star London hotels, many of which had tried to jack up prices by 50 to 80 percent, are half-empty. The West End show “Sweeney Todd” is taking a partial hiatus during the Olympics. Excess seats to hits such as “Singin’ in the Rain,” for which tickets can run upward of $130, were being offered by online discounters this week for as little as $23 ($39.50 with dinner).

Things were eerily quiet this week at the Victoria and Albert Museum, home to the world’s largest collection of decorative arts and usually packed this time of year. During the Olympics, the museum even pushed closing time back from 5:45 p.m. to 10 p.m. to accommodate crowds. But evenings have been surprisingly slow — so slow that on Monday after 8 p.m., only two people attended a fashionable exhibit on British glamour.