La Fonda expands into other ventures

Jun. 26—For the first 100 years, La Fonda on the Plaza stayed put at Old Santa Fe Trail and San Francisco Street.

For the next hundred years, it started spreading around downtown right out of the gate.

La Fonda got a head start on its 2022 centennial year with the January 2021 acquisition of the Old Santa Fe Inn. This gave La Fonda an overflow option for large parties and also a lower-priced option.

Since then, the 180-room La Fonda has also taken on management of 26 short-term rental units from AdobeStar Properties in February and rebranded them as Santuario by La Fonda.

And the hotel has a few more post-pandemic works in progress. The hotelier in spring 2022 acquired the former Alvord Elementary School that closed in 2010 and entered a partnership to create a boutique hotel out of the former St. Francis Cathedral School at Paseo de Peralta and Alameda Street.

La Fonda will likely also become the operator of the Washington Inn, a 27-unit hybrid boutique hotel/short-term rental project in the early stages of construction on Otero Street. La Fonda has also shown interest in being the operator of a planned boutique hotel in the former Outside magazine headquarters adjacent to the Railyard.

"One of the challenges we have is we have more demand than the hotel can handle," said Rik Blyth, newly promoted to president of the new La Fonda Hospitality Group. "We're sending people to other properties. We were sending our guests to Cerrillos Road."

La Fonda Hospitality Group was created in June to manage the growing collection of properties.

"It's more than La Fonda now," Blyth said. "How do we say that?"

At the front line in March 2020 as the coronavirus pandemic instantly slashed room occupancy rates at downtown hotels to 5%, Blyth started thinking outside the traditional hotel box. Unlike some other downtown hotels, La Fonda never closed, but its 2020 revenue ended $13 million below projections at the start of the year.

Philip Wise, majority owner of La Fonda and founding partner of Dallas-based Cienda Partners, himself experienced the room crunch at his hotel as his son got married this month at La Fonda but only 65 rooms were available for 130 guests.

"To be successful in Santa Fe, you have to be outside your comfort zone all the time," Wise said. "Rik would say [in the early months of the pandemic], 'Here are the new rules; here's what we are doing.' That demonstrates we can operate outside our comfort zones."

As pandemic restrictions thawed in 2021, the world had changed. The hotel world was changing, too, as short-term rental usage was increasing.

"The pandemic sharpened our instincts," Blyth said. "Our wedding coordinator was telling me we have a lot of people staying at Airbnbs."

These days, La Fonda stages more than 80 weddings a year, typically with wedding parties of 75 to 200 people.

"[The pandemic] gave us confidence in our team," Wise said.

The pandemic may have spurred the entry into short-term rentals and acquiring Old Santa Fe Inn, but the expansion beyond the Plaza hotel's boundaries is a natural evolution when considering nearly every square foot of the century-old building has been renovated since 2007.

In late 2021, the local Barker real estate family approached La Fonda to offer acquisition of the Old Santa Fe Inn and later also the former Alvord Elementary School campus. La Fonda said yes both times.

"It made sense," Blyth said. "They don't have a national management company. We don't have a national management company."

The early thinking for Alvord is for "short-term rentals, entertainment, food, beverage, dining," Blyth said. "Plans are being drawn up."

A key player in La Fonda's present and pending future is Andy Duettra, owner of short-term rental company AdobeStar and also general manager of Adobe Abode Real Estate. Duettra and Santa Fe commercial real estate broker and developer Marc Bertram are building the Washington Inn at the location of the historic McKee Office Building on Otero Street.

"At this point, it is presumed Santuario by La Fonda will be the operator for Washington Inn," Duettra said.

"I feel pretty good that we will be involved in the Washington Inn," Wise said.

Duettra also brought in La Fonda to a one-third ownership split with himself and Racquel Huslig of the former St. Francis Cathedral School, which Huslig bought in 2021. In the short-term rental business since 2006 with AdobeStar, Duettra is providing short-term rental expertise to La Fonda and is also involved in the Alvord project.

Wise has known Duettra and Bertram for more than 20 years, and Duettra is longtime friends with another Cienda Partners partner, Barry Hancock. Duettra has been trying to pull Cienda Partners to short-term rentals for much of the time since Cienda acquired La Fonda in 2014 and finally found a fit for the La Fonda team in the past year or two.

"It's a boutique hotel concept," Duettra said about the Cathedral School. "It might have for-rent units as part of it. The main thing we are trying to achieve is upgrade the connection between downtown and the east side."

First, though, La Fonda needs to determine the structural realities of the 1949 school building before proceeding with plans, Blyth said. But a large downtown building with about 100 parking spaces has appeal by definition.

"Location, location, location," Blyth said. "They had some plans," he said, referring to Huslig and her prior partner. "We're still at that stage trying to decide how much it would cost."

La Fonda Hospitality Group is poised to keep building its portfolio in creative ways.

"Anything that is complementary to the same service level of the La Fonda, whatever that may be," Wise said. "The new generation of travel: Their experiences are different than ours."