Scaling Soulfully: Financial Insights from Castlerock’s Hubert Worrell on Boutique Hotel Investment

As we prepare for the 2025 Boutique Hotel Investment Conference in New York City, we’re diving deeper into what it takes to fund and grow independent hotel properties in today’s economic climate. In a recent conversation with Hubert Worrell, CFO at Castlerock Asset Management, we uncovered clear, pragmatic wisdom for boutique hotel owners navigating the world of financing, adaptive reuse, and asset growth.

Worrell brings a candid, experience-driven lens to the table—grounded in both numbers and the nuances of hospitality.

Start with Soul—Then Run the Numbers

When assessing potential investments, Worrell emphasizes the importance of anchoring a project in its sense of place: “Once we know we have a destination with enough soul and the right location in that market, the first litmus test in our underwriting is tried and true. We look for the NOI Yield on Total Cost as our initial gatekeeping metric.”

That financial discipline, he notes, helps eliminate distractions early. “The deal still has to meet all sorts of metric hurdles after that, but if it fails that first test, it’s a pass for us.”

Risk vs. Reward: Boutique vs. Branded

While big brands offer a degree of predictability, boutique hotels—by nature—operate on a different curve.

“The big brands have their place, and they can oftentimes provide a performance floor,” Worrell says. “But we find that they also create an artificial performance ceiling in the minds of the guest. Boutique hotels, therefore, are higher risk but also higher potential reward.”

2025 Investment Outlook: Debt vs. Equity

With macroeconomic uncertainty lingering in the background, investors are recalibrating how and where they deploy capital.

“Debt, for now, seems to remain available,” Worrell notes, “but equity has been much choosier in picking its spots.” Boutique hotel owners should be prepared for deeper diligence and more selective capital partners as they pursue new deals.

Independence Is the Asset

Contrary to popular belief, preserving a boutique hotel’s character and maximizing value aren’t mutually exclusive.

“Oftentimes, this is presented as an ‘either/or’ choice. I believe that’s a false premise,” says Worrell. “The way to maximize your asset value is through maintaining and leaning into your boutique identity.”

Shared services and creative operational models can help independent hotels scale more sustainably. “The lower you can keep your ‘fixed cost,’ the more upside as you grow the top line,” he explains.

The Human Factor in Funding

Even in a world increasingly shaped by data and automation, relationships remain at the core of successful deals. Worrell’s advice to boutique hotel owners is simple but powerful: “Be personable. I still believe that people make investments with people first, and then into a project second.”

Adaptive Reuse: Proceed with a Buffer

Castlerock’s project, Bobby Hotel in Nashville, was a textbook case of adaptive reuse. Turning an old office building into a vibrant boutique property came with lessons learned. “I would say in the case of changing the building’s use, have a healthy contingency,” Worrell advises. “You never know what you may encounter.”

Why This Conference Matters

To Worrell, the Boutique Hotel Investment Conference is more than an industry gathering—it’s a space for critical conversations that don’t often happen elsewhere.

“The Boutique Hotel Investment Conference is one of the few places where independent hoteliers and investors can have real conversations about growth,” he says. “Scaling a portfolio isn’t just about capital; it’s about understanding where the market is headed, building the right partnerships, and making smart, strategic moves.”

Join us on June 4, 2025, in New York City for a day of insight, connection, and inspiration. This is where boutique investment gets personal—and powerful. Register here.