CHAMA, N.M. — The summer tourist season in this tiny mountain town is well under way, and the quiet RV park nestled under towering cottonwoods ought to be full.

But with diesel fuel nearly $5 a gallon at the local gas station, Russell and Marji Patterson are seeing a dropoff in business at the riverside campground they've operated for almost three decades.

There are fewer campers — on a recent Friday afternoon the park is only about three-fourths occupied — and family groups are noticeably absent.

Russell Patterson says he's learned to live with the ups and downs of a tourist-oriented business in a remote area of the southern Rockies where a scenic railroad and outdoor recreation are about the only draws.

"But this gas thing — this is sucking all the extra money out of the American household," said Patterson.

"The mainstream won't feel it as much ... but back towns like this can really get hurt."

In the northernmost reaches of New Mexico, a scant eight miles from the Colorado border, the Chama area offers stunning scenery, its green coolness a perennial draw for flatlanders fleeing Texas, Oklahoma and southern New Mexico.

It's been a tough year, though. Winter snows clobbered the town of 1,200, causing roofs to collapse — including on the town's only grocery store, which has yet to be rebuilt.

Now Mayor Archie Vigil is watching gas prices rise and local sales taxes fall.

"We're going to see a big hurt here in the village," said Vigil, who works as a mechanic for the Cumbres & Toltec Scenic Railroad.

The 64-mile-long railway — billed as the longest and highest narrow gauge railroad in the country — snakes its way through the mountains between Chama and Antonito, Colo., an all-day trip.

It's holding its own this season with a projected 40,000 riders, about the same as last year, said marketing director Gayle Martinez. Already on the must-visit list for many New Mexicans and Coloradoans, "because of the gas prices, it's gotten higher on the list," she said.

But taking no chances, the railway has added shorter, less expensive trips on Sundays to appeal to families, and themed train trips — for painters, bicyclists, mariachi lovers, and gospel music fans, for example. There's more advertising on local radio stations to try to nab last-minute planners.

"This year we're talking about affordable family fun — and we were not talking about that last year," Martinez said.

The railway is also seeing more bus-tour visitors this year, another byproduct of high gas prices.

Some Chama merchants grumble about that, saying tourists who hop from bus to train spend less time browsing in shops.

In rural, mountainous northeastern California, "we used to get a lot of people from Southern California, which is 500 miles away," said Bob Warren, general manager for the Shasta Cascade Wonderland Association, the tourism organization in a eight-county region about the size of Ohio.

This year, the marketing effort is being focused closer to home, in Sacramento and San Francisco, he said.

And merchants are pitching deals designed to lure reluctant travelers.

On Lake Shasta, Seven Crown Resorts is offering free fuel when vacationers rent gas-thirsty houseboats, up to $500 for a seven-day trip.

It's made "a huge difference," drawing mainly first-time customers and keeping business roughly on a par with last year, said executive director of marketing Karen Lippe-Ferrell. The special is also available at the company's locations on the California Delta and on Lake Mead and Lake Mohave.

Tourist attractions elsewhere have beefed up their offerings to try to counter the double whammy of higher gas prices and a shaky economy.

Michigan's Upper Peninsula, which draws its summer tourists and winter snowmobilers largely from the lower portion of the state, is feeling the one-two punch of auto industry woes and gas prices.

"It's killing us up here," said Delain McCool, who owns a resort with eight cottages on Halfway Lake near the town of Newberry, "the official moose capital of Michigan."

Lodges have lowered their prices to draw visitors to the area's lakes and forests, she said.

Still, her business in June was half of what it was three years ago.

For some reason July was better, maybe because of the federal stimulus checks, she said.

"It gives me hope — but I'm not going to hold my breath," McCool said.