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Saturday, Jun 15, 2024

Soul Community Planet Founder Seeks Sustainability in Hospitality Practices

Ken and Pam Cruse first met when working at Marriott International in 1996. Since then, the couple has cultivated a mission to change the business priorities of the larger hospitality industry.

In 2018, they founded their own hospitality venture, Soul Community Planet (SCP). The Laguna Beach-based company has spent the last several years purchasing vintage properties, investing up to several million dollars in renovations, then managing the rebranded resorts with sustainable-based practices at the forefront.

Practices include low-waste accommodations, fair-trade pricing which gives customers input on costs and a giving-back program that provides community resources or donates to a nonprofit with each booking.

“We’re trying not to be the only ones—we’d love to inspire Marriott and Hilton to hold themselves accountable like we do,” Chief Marketing Officer Pam Cruse told the Business Journal.

“The hope is to inspire the broader scope of brands and businesses that occupy our very large industry,” she added.

SCP currently counts 10 properties in its portfolio, each supporting a local cause and donating to a nonprofit.

For these reasons, Ken and Pam are part of the Business Journal’s OC 50: The Giving 50, which highlights Orange County entrepreneurs who are also making headlines with their philanthropic work.

Every Stay 

Locally, SCP owns two hotels in Laguna Beach: SCP Seven4One and its newest property, Laguna Surf Lodge. The latter opened in March after a two-year, $8 million renovation.

As part of SCP’s Every Stay Does Good (ESDG) program, both Laguna Beach hotels are partnered with the Boardriders Foundation and SeaTrees. For each stay booked at either property, SCP will plant one sea tree, or kelp or seagrass, along the Southern California coastline via the organizations.

These efforts are on top of a couple existing initiatives from the ESDG program, which include providing adolescents with mental health resources through We Well-being and planting trees in unnaturally deforested areas around the world with One Tree Planted.

The owners said they typically budget 3% of SCP’s gross revenue for the various organizations part of ESDG. The Cruses have also committed to deploying an additional 5% of profits towards the program.

The company did not disclose financial specifics.

“We’re drawing out those connections and are able to feed that back into the local community,” Pam Cruse said. She also noted it was an alternative to the standard points programs.

“It’s our form of loyalty,” she said.

ESDG also allows the company to better align with the guests that stay, Chief Executive Ken Cruse added.

Since SCP Seven4One and Laguna Surf Lodge opened, 8,000 sea trees have been planted.

“Choosing to stay is choosing to make a good impact,” Ken Cruse said.

Prior to SCP, Ken Cruse worked almost 10 years at Aliso Viejo-based Sunstone Hotel Investors Inc., including the last three years as its CEO. Sunstone is a lodging real estate investment trust that nowadays owns 15 hotels with 7,307 rooms, most of which are operated under nationally recognized brands. It generated almost $1 billion in 2023 and has a $2.1 billion market cap (NYSE: SHO).

Financially Sustainable 

“The last few years have been about proving out the SCP concept,” Ken Cruse said. SCP has been “testing types of properties and [locations] and finding good prices and real estate deals.”

The hospitality firm’s first property was SCP Colorado Springs, which SCP reopened in 2018 following a nine-month $6 million renovation.

Based on their “holistic hospitality” business model, the founders decided to focus on nature-based, boutique locations that could “fly under the radar” of their larger competitors later adding hotels in Hawaii and Oregon. They also bought and renovated a resort in Costa Rica.

With 10 rebranded hotels in SCP’s portfolio, the Cruses say they are optimistic about SCP’s chances to scale in size and enter additional markets in the years to come, despite concerns about the current uncertain economic outlook and state of the real estate market.

For now, the company operates 10 hotels, all between 12 to 200 rooms, according to Ken. He is projecting the company’s current portfolio will yield more than $50 million in revenue for 2024.

“The opportunity is in its scalability” he said, noting that SCP is constantly working to land new real estate deals.

“Ideally, we would have a band of hotels all the way up the California coast at the logical stopping points,” Ken Cruse added.

In terms of adding more nonprofit partners along with new hotels, “we want to be a part of any solution wherever we are,” Pam Cruse said.

Outside the company, Pam and Ken Cruse are active in a number of organizations, including We Well-being. Ken currently sits on the board of directors at Miracles for Kids and was chairman from January 2021 to December 2022.

What’s Possible

Hotels are only a part of the “holistic” hospitality equation for SCP, with plans to eventually further its original restaurant concepts into a second line of business with stand-alone brick-and-mortar locations.

The Terra Kitchen restaurant launched first at the SCP Redmond Hotel in Oregon, and later expanded to SCP Mendocino Inn and Farm and the newest SCP Corcovado Wilderness Lodge.

The Wayfarer Club, which serves tavern-style small plates and cocktails, also operates at the Redmond hotel.

It could create its own division of retail products as well, Ken Cruse said.

SCP is also testing out an events program that will put on educational sessions with local nonprofits or wellness retreats at neighboring hotels.

Ken Cruse noted there were no set timelines for these projects as the company “doubles down” on the existing hotels for now.

“Once there is a larger network of hotels, there will be more chances for regulars to stay at more locations,” he said.

Increasing Value

Several of the hotels that Soul Community Planet (SCP) has turned around have since increased in value as a part of the firm’s portfolio, according to a company presentation.

Properties such as SCP’s largest hotel, the 205-room Salishan Coastal Lodge in Oregon, and the renamed SCP Hilo Hotel in Hawaii, have seen higher valuations following rounds of renovations, which have led co-founder and Chief Executive Ken Cruse to identify the type of hotels SCP will continue to acquire and redevelop.

Cruse said the SCP concept will keep the business “dynamic” rather than a model to replicate at every property.

“We are acquiring hotels in markets where they can fly low under the radar because we’re not looking to play against the larger players,” he said.

“The best positioning is in two different types of assets,” Cruse added. “There are the small town, boutique hotels, or downtown motels. The other is larger scale, nature-based resorts.”

SCP also depends on the repeat business of its “environmentally conscious” customers.

Direct bookings with SCP have increased over the years, currently making up over 60% of room nights, according to Cruse.

“If we can do well with 10 hotels, we can do better with 20, 50 or even 100.”



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