When is your trip?
Mesa Verde National Park is one of the musts in the area. Some of the ruins might not be suitable for you with a child in a pack, (or for small children in general) but there will be lots that you are able to see. If you decide against Mesa Verde, you might visit Canyons of the Ancients National Monument....I've been to Painted Hand and Lowry and those should be accessible for you. But if you go, do check road conditions at the Anasazi Heritage Center at Dolores because those sites are accessed by dirt roads which can be pretty messy if it has rained. Stay in Cortez (6200) your first night to help acclimate to the altitude. Maybe see the Indian dances at the Cortez Cultural Center.
You could stay in Cortez the second night, or go on to Durango.
I wouldn't recommend the Durango Silverton train ride with an infant or toddler, but many people do it. It can be a long day, and you'd be going up considerably in elevation, so you'll want to watch for unusual irritability, fussiness, or refusal to eat/drink--some of the ways small children/babies can show signs of altitude sickness. If you drive to Silverton and on to Ouray, you have the flexibility of hiking and exploring along the way if your little guy is doing fine; but if he's unusually fussy you can speed up the trip and get on to Ouray, which is below 8000 feet. I would stay two nights in Ouray. You can walk around town, take a carriage ride, play in the hot springs pool, hike.
There's lots of hiking around Ouray. The Ouray Trails organization has a couple of great booklets you can order, or they are available at the visitor center. I'd recommend "Hiking Ouray with Kids--and Everyone Else!" You could drive to Montrose to visit the Black Canyon of the Gunnison National Park if you feel you have the time.
On your last day in the area, you'd drive through Ridgway (nice walk from Ridgway toward Ridgway State Park) and to Telluride for a visit to town, Bridal Veil Falls, and a ride on the free gondola. Spend that last night in Telluride or drive on to Cortez for the trip home the next day.
We are thinking about making the trip the week after Labor Day (hoping that crowds are down). If we are trying to consolidate our lodging in two towns, which two would you recommend, and how many of our 5 nights in each?
That totally depends on what you want to do & where. Do you want to visit Mesa Verde?
I do understand it being much easier to consolidate the locations to minimize packing/unpacking, especially with a baby.
I really think you should spend two nights at the intermediate elevation of Cortez, Mancos, or Durango to help acclimate. If it weren't for that and the possibility of Mesa Verde, I'd send you straight to Ouray and Telluride to divide your time equally! I think you'd enjoy Ouray with the hot springs pool and plenty of hiking and scenic beauty; but Telluride would be an equally good option with lots of hiking and more upscale lodging/restaurant choices. Telluride would also put you an hour or so closer to home when it's time to depart. And of course many many visitors enjoy their entire vacation in Durango and do day trips to the surrounding area. There really aren't any bad choices.
Do you know when you are going? We will be going over memorial week. Our daughter will be 22 months old. I have never been to this area but I should be able to give you advise after our trip. We went to the moab area when she was around that age and hiked many of the trails. In Mesa Verde, the ranger discription says that you can go on the ranger led hikes if a kid is in a backpack.
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