The small village of Schmilka in the eastern German state of Saxony is right on the border with the Czech Republic, set between the Elbe River and the steep Elbe Sandstone mountains.

Matthias Deussig runs a historic bakery there, complete with a water mill, right along a hiking path on the slope. He hopes for visitors, but they have been few and far between since the floods.

Deussig fires up the ovens at midnight, but says he "can't start baking until 4 in the morning." He proudly points to an oven fired with wood, just like in the 18 century. Everything is always prepared fresh, he adds, so "it takes as much time as the oven needs."

The bakery runs entirely without electricity. That was a blessing last month when half the village was flooded, the power supply failed and the only road from Schmilka to neighboring Bad Schandau was impassable. The village was cut off from the rest of the world, but Deussig was able to provide people with freshly baked bread.

Reopen as quickly as possible

The Helvetia Hotel, an organic hotel situated at the other end of the village right along the river, has Deussig's breads and cakes on offer. "The first two floors were flooded," says Sven-Erik Hitzer, the hotel's owner. "The ground floor stayed flooded for 10 days."

Despite the desperate situation, Hitzer pledged the hotel would be ready to reopen again on July 1. He saw that date as a "patriotic commitment" - and with the aid of 80 helpers and immense personal dedication, he managed to reopen on time.

Infrared for dry walls

Hitzer resorted to a new drying technique - infrared dryers installed right in front of affected areas, allowing water to evaporate - that quickly helped draw the moisture from inside the walls.

"We still have vacancies," Hitzer says, adding the hotel has not yet reached its usual level of bookings, even if tourists who prefer eco-friendly and organic holidays are particularly loyal customers. August bookings look good, however, he says - while noting that other hotels are likely to be struggling much more.

Hitzer is concerned about tourists on day trips. The Elbe bike path, which runs along the river's left bank, usually leads many cyclists right to Schmilka. The path is open again, but these day trippers have "failed to show up," Hitzer says. Cyclists are also sorely missed in the café, the restaurant and the bakery.

Coffee and cake from a trailer

In neighboring Bad Schandau, the historic marketplace resembles a huge construction site. Some of the stores are still closed, but the owners are selling their wares out of trailers. The cafés have reopened and even some riverside hotels are open for business again.

Aware of the difficulties faced by the tourism sector, the state of Saxony has earmarked an extra 1.8 million euros ($2.38 million) to help the previously flooded regions attract tourists once again. Local producers that supply the hotels and restaurants have also been affected by the drop in tourist revenue.

Joachim Oswald of the regional marketing association refuses to give up, however. "We have to spread a sprit of optimism," he says.

Major restoration still on the horizon

Under the circumstances, Hotel Helvetia was lucky. The gardens are green, with barely a trace of the floods left. Chairs have been set up on the river and a large swing hangs in a tree.

Hitzer is thankful the floods didn't hit during peak season, forcing him to close the hotel during the summer months for extensive renovation work. Hitzer has scheduled a thorough renovation for winter, when tourists rarely stray to the region.