It's very true and happening all over the Western world.
Gay villages were originally set up because they offered a safe refuge from an unwelcoming society. They were the one area were you could be gay and not stared at or be afraid for your safety. Times have changed and so have gay villages and the need for them.
Relatively few gay people even visit them anymore and if they do it's usually only for their occasional night out. Gays have fled the villages and gone to other usually urban neighbourhoods. In contrast it is mostly straight people who are taking their place as it transforms from a gay-only neighbourhood to a more generic one. This happens all the time just as Little Italy use to be strictly for Italians, now it's a conglomeration of everyone.
Gay villages cater far more to tourists now than the average gay person as they have simply moved on.
The old 7/24 location?