The carefully curated world of Sonder, a hotel and apartment company promising a stylish alternative to traditional lodging, has abruptly crumbled. Renters are now facing unexpected displacement, finding themselves locked out mid-stay as the company navigates a swift bankruptcy liquidation.
Just days ago, Sonder Holdings Inc. announced it was shutting down its U.S. operations under Chapter 7, a move that sent shockwaves through its customer base. The unraveling began with a complex partnership with Marriott International, a deal initially hailed as a financial lifeline.
In August, the agreement with Marriott brought in $146 million, but it quickly became a source of crippling problems. Integrating the two companies’ booking systems proved disastrous, leading to escalating costs and a dramatic decline in revenue for Sonder.
The company’s statement revealed “severe financial constraints” stemming from the failed Marriott integration. Unexpected challenges in aligning technology frameworks created significant, unanticipated expenses, ultimately proving insurmountable.
Founded in Montreal in 2014 by Francis Davidson, Lucas Pellan, and Martin Picard, Sonder quickly expanded, offering beautifully designed apartments in 37 cities across nine countries. It aimed to attract remote workers and travelers seeking a more refined experience than typical rentals.
Despite its initial success, Sonder struggled to secure further funding and ultimately failed to find a buyer before the Marriott deal collapsed. Janice Sears, Sonder’s interim CEO, expressed devastation, acknowledging that liquidation was the only remaining option.
Marriott swiftly terminated its licensing agreement and announced Sonder properties were no longer available for new bookings. The hotel giant pledged to assist guests with existing reservations, promising to contact those who booked directly through Marriott channels.
However, the reality for many guests has been far from reassuring. Individuals who booked through Sonder reported having their reservations cancelled with little to no notice, leaving them scrambling to find alternative accommodations.
Outrage quickly erupted online, with stranded travelers sharing their experiences. One guest posted an email notification of eviction from a Marriott property with less than 24 hours’ notice, lamenting the complete lack of support or alternative arrangements.
Another traveler, en route to Toronto for work, found their Sonder booking cancelled, facing the daunting task of securing a new hotel room. Marriott’s attempts to rebook them came with a hefty price tag – an additional $500 per night at a Courtyard hotel.
The fallout has sparked criticism of Marriott’s handling of the situation, with many accusing the company of damaging its reputation. One social media user described it as a “huge own goal,” highlighting the potential alienation of loyal Marriott Bonvoy members.
For those affected, the sudden collapse of Sonder has resulted in significant financial burdens and travel disruptions, with some facing costs of $1500 or more to rebook accommodations. Sonder has indicated that updates regarding its international operations will follow its bankruptcy filing this week.
