The Soul Community Planet Playbook for Performance and Purpose - Pam & Ken Cruse, SCP Hotels

Josiah Mackenzie:
Ken and Pam, it's a real delight to see you again. I appreciate you making time to record. I really enjoyed our first conversation that took place a while ago now. I'll link to it in the show notes where people can watch and listen to that. But recently, I had the chance to visit some of your Mendocino properties with my wife, and it was incredible. Escaping the city, going into nature, a couple hour drive, the properties were just highly individual. Everybody I spoke with was so hospitable, and there were some amazing surprise and delight moments. There's some llamas on property. The buildings were amazing and kind of fresh, and the food was delicious, and I just had this sense of feeling so relaxed. And it's going to sound like a trivial thing because we're going to get into some important big topics, but I love the swag. You walk in the door and there's an amazing swag store. I'm wearing the hat now. There's the world's most comfortable hoodie that I wear practically every day. I wonder if we could just start on a soft note. Tell us a little bit about the swag, the amenities, the guest experience when you first walk in the door of the Mendocino property, for example. Why invest so much in that? There's way more than most properties I visit have.

Pam Cruse:
The intention of SCP is welcoming you into a home. Holistic hospitality is about greeting the whole person. So we're glad that you felt that way immediately there. Each property is a little bit different in what they offer potentially. And we are looking to add more focus on the llamas, for example. So more merch coming soon. You can come back. But it's meant to be that welcome feel, boutique hospitality feel. And as you know, that property is very different and unique with the farm story with the chickens and the llamas there. Merchandise can be found anywhere, but when it's given and shared with great intention from a holistic hospitality, you feel it. And I'm so happy that you're wearing the sweatshirt every day. It's just like a big blanket of SCP around you every day.

Josiah Mackenzie:
So comfortable, it's amazing. And from our last conversation, you both have experience working in some of the largest hotel and hospitality companies in the world. The individuality of your properties really stands out. And it stands out to me because I see a lot of hotels and this one was quirky, but in a great way. I wonder if you could speak to just the physical infrastructure. I know your properties are different, but in Mendocino, for example, I feel like there's something more to it than that. It's part of the ethos of your brand.

Ken Cruse:
I'll start on this one. And if I can just finish on the swag piece real quickly. Very importantly, we're not about fast fashion as a company, but we are about responding to the desires of our guests. And I think that's yet another validation of what we're building in some ways. So many people said, hey, can I get it? Do you have any items? Yeah, but can I get a sweatshirt and a hat? Water bottles are huge, huge things because people come to our properties, they realize we don't have plastic water bottles. So we give them these great long-term reusable double-sided aluminum bottles. So there's always been a purpose behind that. The sweatshirt, it comes in handy when people come to Mendocino and they realize it's a bit chilly. They think, we're going to go to the California coast.

Josiah Mackenzie:
And this thing is warm. I gotta show this now because there's also just great art on the back. You didn't just slap a logo on this. I like being seen in this, I'll be honest.

Ken Cruse:
Our daughter will be so happy to hear that you got the mushroom one. She helped to design those. We've got a family business at play here. But back to your question about the nature of the built environment, the buildings that comprise the Mendocino properties. In Mendocino today, there are two different properties. There's the Mendocino Coast Lodge, which is on a 10-acre bluff top overlooking the Pacific Ocean, gorgeous property. Every room is a full-on ocean view. You've got the great little restaurant that's been recognized and is getting more recognized now with our new team. And then you've got the Inn and Farm, which is where you stayed. And that is just a neat property. It's a compilation of three very distinct inns that were developed over the years. The oldest building was built in the 1800s and it just maintains that 1800s character, including the rickety staircases and the floors that are not level and the windows that are hard to see through because they're wavy glass. And that's pretty cool stuff.

That is by design. I came from the institutional side of the business, as did Pam. We both worked for Marriott International out of grad school, learned a ton from that amazing organization, and spent most of our careers on the larger corporate chain side of the world. We learned a lot from those businesses, and we also got exposure to what's not being directly provided by those entities for modern consumers and folks who are traveling with a mindful angle, or conscious consumers, whatever label you want to apply here. It's not really part of the main wheelhouse for the major chains to provide that type of a boutique, handcrafted, uniquely non-conforming experience like what you had in Mendocino. As I said, that's by design because we can find those types of hotels in markets that are highly SCP friendly, but also which don't have exposure to us fighting with Blackstone or the Breeds or whomever who want to buy properties, who typically have deeper pockets and access to lower cost of capital. So we're very careful about what we acquire. And then part of our plan is to bring together story hotels in great markets that we can consolidate into multiple property complexes. So we can get a little bit of operational efficiency if we pull together four 25-room hotels in one market. Not nearly the amount of operational efficiency, to be completely clear, that you might get if you built a 100-room purpose-built structure in that same market. But nonetheless, we can acquire these hotels at great prices in relative terms. And then again, through an assemblage of multiple properties, get some operation and marketing efficiency.

Josiah Mackenzie:
So that's interesting. I was gonna ask the world's most vague open-ended question, but that is a terrible way to have a conversation like this. So I'm gonna frame it up a little bit around what you're seeing and hearing in the world right now. My experience as a guest in Mendocino, you mentioned you use the word handcrafted, right? There's sort of a this is a one of one. This is the opposite of this big box experience that, honestly, feels very interchangeable, right? You can be anywhere in the world. I feel like I was for sure in Mendocino and there was no mistaking it. And if I thought I wasn't, I looked out and there was a llama looking at me. And it was just a one-on-one experience that I remember. It just felt different. So I imagine many of your guests share that, but I am curious, just what are you seeing and hearing in the world? So many things are going on. You have kind of a front row seat of a lot of this. What are you observing?

Pam Cruse:
Yeah, just to round out what you described, in Mendocino, for the listeners and the viewers, not only do you get to see the llamas, but you also, in the morning, you're eating eggs that were laid by the chickens that are right there on property. And in the evening, you might have a pizza that has basil and tomatoes and other things that were grown right there in our organic gardens on property. So it's just a different experience that we're able to provide that isn't that scalable. You can't do that at a 500-room hotel or larger. I guess maybe some people are trying, but I wish them luck. It's something that is uniquely a quality of a smaller boutique property.

I can just add a little visit Mendocino plug. As you know, you can walk out and you can see the ocean from one view. You can step into the state park right next door and literally walk within the trees there or across the street and hike along the ocean, along an open ranch there that's public domain. So you've got the forest and the ocean, and a lot of our properties have this coastal real estate. People enjoy getting to the coast, and it's really a beautiful drive as you noted driving up to it.

Josiah Mackenzie:
Right. Just to briefly build on that, I feel like many participants in the industry are always thinking about scale, and that has a time and place. But I am very interested in this sort of one of one. It takes a lot of work to hunt down these properties, but as a guest, it makes a big difference because all of the things that you described, it's not only looking out, seeing the garden, walking through it, getting a tour from the general manager, and then enjoying the pizza, but I feel like the pizza just tasted great. But I wonder if it tasted even better because of that whole experience. Or the coffee tasted better because we did this ocean-side stroll that is a function of the location. And I feel like sometimes marketing and brand and positioning feels a little bit manufactured. Again, there's a time and place for that, but I feel like place and brand and guest experience are so connected for your properties.

Ken Cruse:
For sure. And I'm not going to get scientific here, but there's a lot of science that supports what you just said. When we're consuming an experience, it's a product of what did you anticipate you were going to experience before you came, and then your reflection back on that as you're doing right now is all part of that experience. But the part where you're actually living the experience, it's so interesting how the different facets of that experience are enhanced by the overall milieu of what it is that you're doing. Did I have a bad sleep last night? Well, the coffee's not going to taste as good because of that. Or was the person who checked me in surly or not there when I was supposed to check in? That too is going to potentially negatively affect your experience versus you think of this series of different synergistic, almost aha or surprise moments, like looking out your window to the ocean view, but then seeing a llama staring you back and saying, oh my gosh. Or the different pieces of it, like we talked about, the freshly grown produce and fruits and so on. All that stuff adds together to create an almost incalculable benefit that goes just beyond the one or two things in independent consideration.

What I would do with that too is go back to your question. Like what are guests looking for? What are people looking for? I love that open ended question because Pam and I and the team spent so much time thinking about this. And part of it is we try to think, are we just subject to massive amounts of confirmation bias because so many things that we're seeing in the world point to what we're building here. And I'm not saying that to sing the praises of Soul Community Planet. I think in many ways we're just fortunate that we built a company around our own value system that happens to coincide very closely with the value system of many Americans and of many of those people who don't feel like their values are being met fully when they're on the road. So we're trying to do a little bit better job with that.

I think what's now evolving here, which factors into our model that was not something we contemplated when we hatched this idea, is the fact that people are overwhelmed with technology. It's getting bigger and bigger in terms of an influence in our life. And in many ways, people are seeing it negatively. The statistics on people who distrust AI are around 80%. 80% of the population distrusts AI for one reason or the other. We happen to think it's an incredibly powerful tool in its own right. But in isolation, that's a good thing in the sense that it overcomes and overtakes your entire life, that's a really bad thing. So people are looking for a way to get away from that and revert back to this idea that we are social beings. We're experiential, we're social beings. We want to meet people face to face. We want to sit around the fire and clink glasses after we've gone on this great hiking trip or mountain biking ride, whatever it is, meet new people who had maybe a similar experience and share their views and their ideas and learn about them. That's human nature. And in so many ways, we're almost systematically pulling ourselves away from that human desire to be social. I believe properties like what we're doing in hospitality in general is well situated to benefit from the fact that people are going to demand that we give back to each other and spend time with one another. So that's a fun thing that we're seeing and the numbers seem to bear that out. People are going to prioritize travel and experiences even when they have to make cuts elsewhere.

Josiah Mackenzie:
I only see that accelerating with time because it seems like technology will continue to accelerate. And so this just feels like a tailwind that is going to support what you both are building. I'll include some links in this show notes. I encourage people to hear our first conversation because you get into both of your personal journeys. And I think there's a lot of authenticity here. This isn't just trend spotting and hopping on a bandwagon. I think what you both have done personally. But Pam, I'd love to go to you to just continue with this thought a little bit more. Is there an element of the guest experience that showcases some of this theme of what people are looking for and how they find it at Soul Community Planet?

Pam Cruse:
Yeah, and before I go into that, I was just gonna quote, we could put it in the notes, a new book by Arthur Brooks. I'm not gonna get all those qualifications, but it talks about, he's a neuroscientist and he's very spiritual. And I think it really lends itself to what we were just talking about, because he talks about people getting off their phones more and doing a little sabbatical, like a vacation for seven days and how your body goes through this kind of thinking of looking for the phone. It's like a tic. We check our phones 250 times a day, he said. It's become this tic and people can't just be. And so this is something that travel and being in places like Mendocino help with. So grounding, whether you're going to get barefoot and go touch the tree or not, you're in that beautiful space. And I highly recommend that. So that would be one of my recommendations.

As for SCP, we have intentional core elements at each property. Like we said, the arrival is meant to be like you're arriving to someone's home. We typically have a welcome drink welcoming you into the area, both non-alcoholic and alcoholic. Our code, we have a commitment to ourselves and to our guests and to our teams, is something that we developed that is meant to hang on the wall in guest view and also in team view. And it's a manifesto. If you think about companies who have a manifesto, a great story. We years ago went to listen to a professional surfer who was very good back in the 1970s. His name is Shaun Tomson and he wrote a book called The Code, and it talks about everybody should write 12 lines of code that is something you commit to. So I will heal or I will whatever is personal. And we listened to that and came back and developed it for SCP, but in a present tense. So what we do and what we commit to. And one of them is we have fun. So it's meant to be very approachable. It's not some boring old school kind of pitch, but it's very important to have that visible.

We have a lot of biophilia. If we don't have a property that's directly in nature, you're going to see plants, even if within the nature of properties, we want to have plants and have that brought inside. Your view is outside. We have something also called the SCP muse. It's this beautiful, we call it our mother nature, and we have are working on that at Mendocino still, but she will be somewhere present in the property. And around her is the floral and the fauna from the local region, so you would see whatever the trees were and flowers and everything there. That's something very important.

We typically have lounges and spaces where we want you to experience the outdoors. So again, even if it's a cold space like Oregon, our properties up on the Oregon coast, you're going to have lots of windows looking out into the trees and have that accessible all the time. So feeling within nature.

And we have many, many ways to experience well-being. So there's multifacets. And I think we talked about this on our first call, so I won't go through all of those, but one of them is mental well-being. And that might be our SCP library having accessible. We have a set of books that we want to have at every property. And that's meant to have that wind down time to get off your phone, borrow a book, wherever you want to go on property. If it's taken to your room that's great too, or going outside and reading in nature. Besides that, we also have games and we want to have games. And that's getting back into the community and whoever you're with, or if you meet some people on property, whether it's playing Bananagrams or Scrabble or breaking out an UNO game. That engagement, sounds very basic, but to the point we talked about earlier, where you are, you'll remember that experience as you continue to have these specific amenities available.

Josiah Mackenzie:
That's great, Pam. Just as a guest, we were talking off air before this around simplicity maybe being something that we could all benefit from. You both touched on this, but we're just fried out and with a lot of technology, a lot hitting us, a lot happening in the world. And there's an interesting opportunity, I think, for hospitality providers to think about, okay, what do we really need our guests to experience? What is the before and after? And it's funny, whether it's playing Scrabble or Bananagrams or borrowing a book, I love it's the little things like the library. I borrowed some books during my stay and found it so great because I brought some books with me. But it was amazing to have curated, here's some books actually that immersed me more into this experience, and likely didn't cost that much. But I feel like my journey as a guest was impacted more than if you spent hundreds of thousands of dollars on some elaborate programming experience. So it's just interesting to ground in, what does it actually, what journey do you actually want to take your guests on? And I really appreciated that.

Ken Cruse:
Well, that's important. I'm glad that you experienced that. That is one of the things that we're aspiring to. Part of it is there's one of the books in the library is Wind, Sand and Stars by Antoine de Saint-Exupéry. And one of his great quotes is, perfection is not achieved when you have nothing left to add. Perfection is achieved when you have nothing left to take away. And we use that in our culture cascades internally and talking to the team about, it's not about layering more and more and more stuff. It's about finding what's really necessary. The concept of essentialism that our guests really embrace. And how do we achieve that sense of simplicity and essentialism so that people can do what's important? Go do that hike at Spring Ranch or walk through Van Damme State Park or what have you. When you're in Mendocino, go say hi to the llamas. That's simplicity. And it comes from having a blank space. And we've talked a lot about, I love this idea because it's so counterintuitive, the importance of boredom. Heaven forbid any of our kids or any of us are bored for one second of our life. And yet boredom is the genesis of innovation. It's the genesis of new ideas and adapting. We need that white space in our lives. And it's back to my railing against the technological roller coaster that we're on right now. The amount of white space in our lives has just reduced more and more. We just can't get away from it.

Josiah Mackenzie:
There's a certain timelessness but also timeliness to this. And I appreciate you both getting into these areas because we recorded about 18 months ago now. It's November '24. It's crazy how much time flies. But I feel like these elements are probably going to be just as relevant 10 or 20 or 50 years from now. And I do appreciate that a lot. That said, a lot happens in 18 months, especially with the pace that you both are leading the organization with. I'm curious if there's been some elements of what you've been up to recently that you'd share with our viewers and listeners, because I know both on the company, on a cultural level, on a programming level, it feels like there's a lot of new stuff happening.

Ken Cruse:
Yeah, there is. One of the things that we've done with this, this company was formed out of the shared values that Pam and I have and an understanding of sort of what's working in the industry and what's not, and where we can maybe apply our values to a business model that is in need, that the world is asking for. I think in our prior conversation, we talked about the concept of Ikigai, and it's a Japanese concept. The wrong way to say it is how I'll say it, but that's how I think of it. It's like a Venn diagram. What are you passionate about? What are you good at? What does the world need? And what can your business actually succeed at? When you can come up with those four leaves of a four-leaf clover, where they intersect, that's Ikigai. That's the concept of Ikigai. I apologize to anybody who understands the more pure description of Ikigai, but that's how we think of it. And so that was kind of how our business was created. And when you've achieved this Ikigai or confirmation with your Ikigai, your chances of being successful and happy with the success that you've achieved are that much greater. And so that was the starting point for Soul Community Planet. We wanted to build a business around what we're good at, or at least we've learned a lot of lessons at, and what we truly care about, and what the world is looking for.

What you didn't hear with that is we want to be a world dominating master of the universe, the next Marriott or Hilton. Those guys are good at being Marriott and Hilton, we'll let them be Marriott and Hilton. They can do their things and we'll do ours.

Pam Cruse:
And that's what I came from, more the real estate side. I'm always saying, hey, here's another one we can add to the mix, here's another one we can add to the mix. And Pam's always the voice of reason saying, look, we're doing pretty well with what we've got. Why do we need to add more properties to this 10-property family at this point? Eventually we will grow some, but it's not like that's our primary calling.

Ken Cruse:
Our primary calling at this point is to continue to prove out the concept and measure our performance. We're both MBAs. We try not to say that very loudly, but we come at things from a quantitative and mathematical approach, a measurable approach. And so we do look at how are we performing on our KPIs, on our key performance indicators, and especially versus the broader industry. That's probably the best way to guard against confirmation bias to say, hey, we're doing everything right, everything's perfect, versus no, we're measuring this one very carefully and here's the objective results.

At the moment, what we're seeing is that the three KPIs that really matter for us are guest satisfaction. We typically measure that in the form of net promoter scores, but we also look at where are our hotels performing on TripAdvisor. That's where all the consumers are going to eventually be exposed to if they have any questions about a particular property. So we try to be number one or number two in our markets. And we really spend a fair amount of time trying to achieve guest experiences that will enable us to earn a five-star review on a platform like TripAdvisor or Google. Net Promoter Score is a different side of it. That comes from an internal conversation that we have with guests. And first of all, the fact that guests are willing to provide constructive feedback about their stays and help us to get better, that in and of itself is a good validation of the relationships that we're building with our guests. We're all busy. When somebody asks me to fill a survey, I'm usually, no thank you. But we get a lot of surveys back. And a product of that survey, it's mathematical, but we can derive a composite score that says here's what the net promoter score of that particular customer was, or the promoter score would be. I'm happy to say that we get really great marks above the level that would be considered excellent in terms of Net Promoter Scores. We're 52 and we'll provide a link to what Net Promoter Score is and how it's calculated. It was a product that was being developed years ago. It really makes a lot of sense. But we're in the top decile of all businesses in any industry when it comes to Net Promoter Scores. That's probably the most important KPI, honestly. If we're not producing happy guests who felt like they had a great stay and their expectations were more than met, then we're probably not doing our job well.

Josiah Mackenzie:
Ken, I want to unpack that just for a moment, because I think it's fascinating. Pam, I'd love to go to you on this. I'm curious, is there a world where a guest can be more than a customer? To your point, Ken, someone asked you for, hey, I don't know if I have time to do this. So it feels like there's kind of maybe an opportunity to build a relationship with guests that is beyond just this is a place to stay, beyond just a customer relationship. As CMO, I imagine you think a lot about that and what goes into that.

Pam Cruse:
Yeah, we've always talked about it's a movement, it's a tribe. We don't land on one word, and we have memberships at certain properties. But overall as a brand, that's what we want. We want a long-term communication with guests that's two-way, right? And we want to offer up cross-promotional opportunities for them to go to, for example, Hawaii, go to our property where there's a really great culture embedded in that specific property. So there's this cross-collateral promotion. But beyond that, it's the values, conveying the values, sharing the values, showing growth within those values.

When we learn something new, for example, we're certified by Surfrider as ocean-friendly hotels and ocean-friendly restaurants for the properties where we have restaurants. As we improve and evolve, we want to share that with our guests and help them come along, because those who choose to stay at properties that are purpose-driven or regenerative travel purpose-driven, specifically, they will continue to stay with us. But it is a community feel. And for me, the growth and the opportunities within there is more than just content. But content and storytelling is part of that. So we have some great partnerships. For example, we work with an amazing apothecary-led company, Anima Mundi Herbals, and we've worked with the founder there. Exposing our guests and providing the opportunity to be part of something bigger than even just SCP is really our goal.

And I wrote down ripple effect. We always talk about the ripple effect. So if we can help one person, whether it's actually getting their feet in the grass and touching the tree or trying something new, sleeping without a TV on, waking up and going and interacting with nature versus being on their phone, that's a win for us. And that's a community that we want to be part of and continue to evolve. We want to have community dinners. That's an example of something that we haven't been able to do at every property on a consistent basis. Yes, others are doing that, but it's something that's really important, having those intimate kind of table for eight or bigger than that, where people can connect and get together and be part of it.

Community is our middle name. It was very intentional. And when we branded it, I explained community as community could be you arrived at a property, you're part of a hotel lobby, and that's a community, right? And then there's a local community. And it's these concentric circles that go out and out and out until it's the global community. And SCP contributes to the global community. And as a guest of SCP, you in fact are giving back to the global community, as being part of that.

Ken Cruse:
Can I add to that a little bit or maybe try to crystallize it? The first page within our SCP Way, which is our internal culture book that we spend a lot of time on, every Tuesday we do a culture cascade meeting with our team and we go through one chapter within that book. The first section of that starts with, we recognize that you are the hero of your own epic novel. That you are in many ways not only the hero, but the author of that. And if we can have the honor of being a contributor in some way to maybe one sentence in that epic novel, or one paragraph even in that epic novel, by helping you to advance that story in a way that you want to advance it, that's the best starting point to form a relationship that goes way beyond just being a guest in our hotels.

And we see that come across when people, as we said, become advocates, go home and tell 10 of their friends what a great stay that they had at whatever property it might be. That's how the relationship gets formed. It's not because you got your, no offense to the, I think the points programs are amazing and they're powerful in their own regard, but it's not because I got my Bonvoy points when I stayed at this hotel that I'm really going to tell all my friends about it. It's because I was able to advance my own personal journey in a way that I didn't anticipate before I came to that hotel. It's the communal dinners. It's the mornings with the llamas. It's the misty hike on the coastline with your freshly brewed coffee. Whatever it is, it's all those unanticipated, unscripted moments that we can help to facilitate. We don't write them for you, but we can help to provide a little bit more of a context and maybe a sharper pencil to draft those sentences.

Josiah Mackenzie:
So this is great. At the end of our last conversation, we were talking about if we had more time, what would be interesting to get into? And one of the things that came up was what are some of the challenges, the hard parts to push through this? Because I think I love what you're sharing. You shared some of the business results. Incredible. These are numbers and performance that everyone would want. We talk about community and loyalty, and these are really powerful concepts. They're easy to say. They're harder to do. So you and your teams are executing this to achieve that. But I imagine not every moment has been sunshine and rainbows and there's been some hard things to work through. I wonder if you'd be willing, either of you, to speak about some of those challenges you had to work through to get to this place.

Ken Cruse:
Yeah. Thank you. I appreciate you saying that, because we're so fired up about what we're building and so excited about it. We tend to focus on all the neat successes that we maybe didn't even expect to have achieved. But maybe those successes mean that much more to us because there are so many stumbles that we've encountered along the way. Whether it's, and I'm typically the source of these stumbles, whether it's an idea that I'm like, we got to do this. We have to be 100% vegan at all of our restaurants starting tomorrow. And as Pam will say, that's not an exaggeration. I tend to do these things where we have to make this change right now because this is what's going to distinguish us. This is what we stand for. And we've done things like that and we've had full-on insurrections by our guests saying, guys, we're on the coast of Oregon, we need clam chowder or something. So we create incremental movements.

So one of the biggest mess-ups I would say is that there's this idea that everything has to be absolute and everything has to be perfect. I mentioned the code previously, and she often reminds me of the line in the code that says, we recognize that we're far from perfect, but we'll always aspire to improve. So pushing too hard to get things done too quickly has been clearly a mess up by me. And yet it comes from the right place. I think we both think in these terms that we know that there's a lot more that we can do. We know that there's a bigger difference that we can make. We know that we can mean more to more people the more deeply immersed in the value system that we stand for, we become. So we're always going to move toward that. And eventually we probably will be a vegan-only organization, or perhaps not. So there's one example. If we had enough time, I would give you 100 more.

Pam Cruse:
You shared some, and feel free to use me as the mess up. I think it's interesting, we have something called peaceful rooms. And the intention is, and even Mendocino doesn't have all peaceful rooms as of yet. We buy properties, a lot of times you buy property, it has TVs in every room. One of our goals is to have peaceful rooms where there's this option that we know people travel with their computers, first of all. Let's be real. They could turn on something if they really need to. But the TV is not the first thing we want you to experience. We want you to come in and just enjoy the surroundings. Take a book, do the wind-down, and really give back to yourself by how you start your day and then you end your day. We'll help you sleep and all that great stuff.

But unfortunately, not everybody understands peaceful rooms. And we do have guests who say, I want my TV. And it's not fully solved, I will say, at SCP. What is interesting is when you're in Mendocino, Mendocino Coast Lodge is that second property there. They never had TVs even when we bought that place. So from day one we didn't have them. And I really loved their former website said, this place is for rest and relaxation, period. End of the story. So you'll find that. Trying to convey our values and teach and educate doesn't always come across. And the team has to deal with the guest who's frustrated by that. And so just continuous learning and education and communication to explain why, right? Because then you can diffuse the situation once somebody can explain that. But there are people who want to just go watch TV, and you know what? That's okay.

And part of another line in the code is that we welcome all. But the implication of that is not written, but the implication is that we welcome all, but we're not going to change what we stand for based on what the guest is looking for, unless it's consistent with the values that we also stand for.

Josiah Mackenzie:
You both are very humble people. I appreciate you going there. It underscores the work that's required to get to these amazing outcomes, to this amazing guest experience. It takes a lot to work through this. Before we go, I'd love to touch on two topics briefly. The first of them being, I'm preparing to speak at the NYU Investment Conference. It's a panel about driving NOI, owner returns. And I wonder if we could speak for a few minutes on the business side of what you're creating, the business case for it. It's challenging for owners and operators right now because of a lot of macro factors and a lot changing in the world. And I wonder if you can speak to the opportunity of what you're creating from the financial side. And then I would love to close to get both of your perspectives on something that you're excited by or is giving you joy now as you think about it. It could be in this moment or something you're looking forward to. So on the business side, can you catch me up on the case for driving NOI, outperforming market benchmarks on financial performance?

Ken Cruse:
Yeah, I'll start with that one. As I said, we love the numbers. If you think about 2025, for example, and I freely admit that this is not an apples-to-apples comparison as much as we're a new company with properties that we've handselected versus the broader industry. But I'll start with that because it is a real and measurable benchmark. Last year, the broader industry achieved a slight decline in revenues. It was down about 0.3%. Meanwhile, our portfolio on a same-store basis was up around 4%. Not world record numbers by any stretch, but a meaningful outperformance of the broader industry.

Importantly as well, we're seeing about 60, it's pushing to 65% now direct booking rate, which is commensurate with what branded, chain branded hotels achieve. And it's about 2x what a typical independent hotel would achieve. So without the network effect, we only have 10 hotels. We don't have brand affiliations as we sit here today, or chain affiliations I should say. And yet we're getting a huge amount of direct bookings in our own right.

Interestingly, as I said, that occurs within the context of not having that network effect. And what I mean by that is if you're going to go to Mendocino, you're probably going to go to Mendocino and really enjoy it. But it doesn't mean that Mendocino is on your weekly trip list or even your annual trip list. Costa Rica is an example. Hawaii is an example. People love it when they come to these hotels, but it doesn't mean that they're going to go there every year. It's just not how people travel. And it's back to this whole idea of net promoter scores. People go and they tell their friends, and then people say, I'm gonna go stay at that SCP in Hilo. It sounds incredible. And so we get four or five people that come to book with us because one person had a great stay there previously. So that's really worked quite well for us.

The next one was a flow through to EBITDA. So last year, again, you have declining revenues industry-wide. You saw a meaningful decline in bottom-line profitability, to the credit of many of the hotel owners and operators. They were able to preserve some of the expenses and drive a little bit of that profitability that you're always looking for, but nonetheless saw a decline in EBITDA. Versus with us, we had about a 23.5% growth in EBITDA in 2025. Q1 of 2026 was even better. Again, I just want to substantiate what I'm about to say with the actual metrics, because I can say how great we are, but if the numbers don't bear that out, it means nothing. So in Q1, we had significant growth, meaningfully outperformed all the big chains on the top line. And then our EBITDA almost doubled in the first quarter. And again, that's the same story, but we haven't added any hotels over that period of time.

I will say, having said that, there's a lot of room for our EBITDA to grow from where it currently is. When you're growing off of a relatively small base, given the amount of investment that we've made in getting the operational standards right, the marketing right, all the other sort of load factors that come into play in a small hotel, it's pretty easy to grow relatively low EBITDA to a much higher number. The challenge is going to be when we take that down to what we believe to be the maximum productive capacity of our hotels, which is a multiple of the EBITDA that we're generating today. So overall performing quite well.

The way that those things happen is you create a product that is not what the MBAs in the back room came up with as, here's what the market is needing and it's got to fit this model, and it's got to be something that the developer community can pick up, that the third-party operators can pick up and do it fairly easily. That's a great model that works well for the chains. For us, we're different. We're vertically integrated. That means we have the brand, the management company, and the real estate all in affiliated entities. It's not quite one roof, but we control all of those pieces of the puzzle. That enables us not only to retain a significant amount of the economics that hotels generate that often, if you're the real estate owner, go to the chain or to the third-party operators. Equally importantly, it enables us to maintain a great deal of control and involvement in the culture, the value systems, the look, the feel, as Pam was saying, the core elements within our hotels. All those things we can morph and change very quickly because we have all three pieces of the puzzle versus most other owners or operators or brands. They're subject to a tripartite agreement for any major change they want to make on the hotel. So we can move very quickly and adopt as needed.

Josiah Mackenzie:
That's amazing. It's something truly special that you've created. Not only to have an amazing guest experience, great culture, just a cool brand and driving the financial performance is exceptional. Awesome to hear that. I'll include some links where people can learn more. But I would love to ask you both, I'll go first to you, Pam. Somebody that's giving you joy now in this whole soul community planet business and ecosystem, or something that you're looking forward to this year. And then Ken, I'd love to go to you to close this out.

Pam Cruse:
Yeah, I wrote down transformation. When we started the brand back in 2018, we talked a lot about the experience economy. And you're seeing that a lot now that articles have come out that was actually already out way back when. The transformation and we've worked with an organization called the Transformational Travel Council. And we have some friends there who have done a lot of research on transformation. And Joe Pine has done some, we could send some links for that as well. But if you think about it, travel is the pre, before you, the anticipation, as we talked about earlier, your experience there, and then the post, right? And so that integration, you asked me about the guest's journey, and I think the transformation and that community feel, as you noted, is that post-travel, right? That's how do you stay connected with this whole soul community planet?

And for me, I go back to just the name of the company was taking care of self first, being part of a community, and also taking care of Mother Earth. And that goes for our teams as well. So for me, the joy, especially as we come into in-season, most of our hotels really, summer is a huge season for them. As new people come on board to work with Soul Community Planet, I enjoy that infusion through all different teams of Soul Community Planet and encouraging people to take care of themselves and then also take care of each other. And then of course, regenerative travel, taking care of Mother Earth. So my joy is in that ripple effect, just one thing that we know that we can affect change in. It's not trying to be the full industry, but we are making changes. And our Every Stay Does Good program has been ticking along for the past 24 months that we haven't seen you. So we are making changes and making the world a better place. And it sounds very lofty, but it's purpose-driven. And for those who want to get into hospitality, I think for a long time, hospitality was only about taking care of others, and we always need to put our oxygen mask on, take care of ourselves as well. And it can be all of that, and I hope that we can continue to see that in our teams as a value.

Josiah Mackenzie:
I love that. Ken, I'd love to go to you. Same question to close this out. Something giving you joy in the business now or something you're looking forward to.

Ken Cruse:
Oh yeah. As usual, Pam and I can finish each other's sentences. I would just expand on this idea that over the course of the last four or five or six or seven years at this point since we formed the company, the compounding effect of some of the impacts that our guests have had by choosing to stay with us is starting to become really powerful. We've planted over 320,000 trees through our relationship with One Tree Planted. We've planted over 20,000 sea trees, which is the kelp, which has some incredible environmental benefits as well. We've done so much for, and when I say we, I mean our guests. We don't do this ourselves. In this context, it is really, when you choose to stay with us, you are making a difference in the world around us. And to see that impact happening with communities that we exist in, with the environment, and then on the well-being front as well, it's just really gratifying, and it just makes us super happy to see that we've been able to do this, and that people are seeing the impact that they're having when they join our community.

Early on we said, this is the next form of true authentic loyalty. Love the loyalty programs for what they are. I would probably give them a different name, because the fact is when you feel like you're part of a community, or you truly are part of a community, and it's a community that's founded and the substrate of which is shared values, and that you then have a measurable impact when you choose to be part of that community. I think that was an idea that we didn't come up with, but we said this certainly applies to our business. It's just been incredible to see that actually come home to roost. So I'm probably most excited about seeing that continue to grow.

Josiah Mackenzie:
So incredible. I feel like time flies always when I'm talking with you both. I really enjoyed this conversation. Thank you for making time to share what you're doing. Thank you for doing the work that you're doing. I'll include a bunch of links in the show notes. Really encourage people to not only check out what you're building, stay at your properties, experience it for yourself. It's incredible. You're going to learn a lot. You're going to feel good. You're going to be really inspired. So Ken and Pam, thank you so much for speaking with me today.

Ken Cruse:
Thank you so much. Loved it.

Pam Cruse:
Thank you.