Hotels in London have been forced to cut their prices dramatically after businessmen and tourists were put off staying in the City by the Olympics.
Museums and theatres are also struggling to compete with the Games, with attendances falling by up to a third.
Steve McNamara, the general secretary of the Licensed Taxi Drivers Association, said cab drivers had been hit hard by the lack of trade and described London as a "ghost town". Transport for London confirmed that traffic was down by a fifth.
The hotel price cuts mean that many rooms in London are now cheaper than they were this time last summer, according to Lastminute.com.
The website said the average room in London booked on a last-minute deal was available for pounds 112 a night compared with pounds 133 last year.
West End traders said business had slumped by as much as 70%, with tourists and Londoners steering clear because of fears about overcrowding.
The Earl of Bradford, the owner of Porters restaurant in Covent Garden, said takings were "disastrous". "Covent Garden is so quiet when it is normally humming with activity," he said.
Nica Burns, the chief executive of Nimax Theatres, which owns half a dozen London venues, forecast that ticket sales would be down by 30% over the summer. "For my six theatres, last week was the worst this year. I think the Olympics are great, but I feel like I've been the bull's eye for the archery competition," she said.
The Association of Leading Visitor Attractions, which represents tourist attractions in London, said attendances over the past two weeks had fallen by about a third.
A spokesman for the British Museum said there had been a fall in the number of visitors of between 25 and 30%.
