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Steamboat Springs — Led by huge decreases at the base of Steamboat Ski Area, Steamboat Springs' March sales tax collections fell in every area of the city.

Decreases by category included a 35 percent drop in lodging revenue.

March was the seventh straight month of increasing sales tax declines in the city and brought the city's year-to-date decline to 18.5 percent, but local businesspeople interviewed Wednesday said they remain optimistic and have seen signs of improvement in April and May.

"I'm hopeful that, with lower gas prices and some encouraging economic signs, that consumer confidence will rebound and people will travel," said Paul Underwood, owner of upscale base area restaurant Cafe Diva.

Citywide, sales tax collections for restaurants fell 20.4 percent. Base area sales tax collections in all categories fell nearly $400,000, or 36 percent. City Revenue Supervisor Kim Weber said the decrease in that area alone accounted for 67 percent of the city's overall sales tax decrease in March, from $2.6 million last year to $2 million this year, or a drop of 22.5 percent.

If there is any silver lining in the fact that the base area accounted for much of the decline, it is that the city's urban renewal authority in that area absorbed some of the loss - thus limiting the city's general fund to a March decrease of 17 percent.

Within its base area boundaries, the URA collects sales and property tax increments above a 2004 base level. So far this year, sales tax collections within the URA are down $195,000 from 2004, and the URA has not received a sales tax increment.

"This is the first time that has occurred since 2004," Weber said.

By category, the lodging sector saw the largest percentage and dollar-amount sales tax decrease in March. Sales tax collections from lodging establishments fell $286,000, 35 percent, from $828,000 in March 2008 to $542,000 in March 2009. Last month, Resort Group Vice President Larry Mashaw told the Steamboat Springs City Council that "Summer looks as challenging as winter, if not more, based on some early numbers."

Other industries, however, claim to be seeing signs of improvement.

"March was OK for my business, and April seemed to be really strong, but January and February were tough months," Steamboat Motors owner Jeff Steinke said. "Everybody sort of sat out on the fence. Right now, it seems to be firming up."

Steinke's observations are confirmed by figures released Wednesday by the U.S. Commerce Department, which reported that total retail sales fell 0.4 percent in April. Vehicles and parts sales, however, increased 0.2 percent in April, according to the Commerce Department, recovering from a 2 percent dip in March.

Two downtown restaurant owners claimed Wednesday that their sales actually increased in March. Brian Vaughn of bistro c.v. attributed his restaurant's increase in sales to the fact it was open seven days a week this year, compared with five days a week last year. Vaughn also noted that last winter was bistro's c.v.'s first.

Colleen Miller of Sunpie's Bistro said the fact her business increased might suggest that while restaurant sales are declining overall, remaining customers might be migrating to less expensive options.

"Of course we're concerned," Miller said, "but I think the more expensive places in town have more to worry about than us."