DILLSBORO – Excursion train operator Great Smoky Mountains Railroad says it is shutting down its Dillsboro operations and dismissing 40 employees because of difficult business conditions.

The railroad will continue operating trips out of Bryson City to the Nantahala Gorge in western Swain County, said Jeffrey Jackson, chief operating officer at Colorado-based American Heritage Railways, Great Smoky’s parent company. The change takes effect Aug. 8.

The general economic slowdown has cut business, and higher fuel costs have deterred visitors and raised the expense of operation, Jackson said Friday.

“We got real used to better economic times, and unfortunately that cycle has changed,” he said. “The businesses that want to withstand it have to change also.”

Railroad passengers are a significant portion of the customer base for many Dillsboro businesses.

The railroad brought about 60,000 people a year to the tourist-oriented Jackson County town, just west of Sylva, Great Smoky general manager Kim Albritton said.