In August 2024, Marriott announced a licensing agreement with Sonder, which primarily offers apartment-style accommodations in urban markets. These properties were being marketed under a new collection called Sonder by Marriott Bonvoy, and this included around 9,000 rooms being added to Marriott’s portfolio.
It was part of Marriott’s never-ending effort to increase its overall portfolio size at any cost. Well, there’s now a negative update on this front…
Marriott has today announced that it has terminated its licensing agreement with Sonder (yes, the announcement came on a Sunday). As a result, Sonder is no longer affiliated with Marriott Bonvoy, and Sonder properties are no longer available for new bookings through Marriott’s channels. Here’s how Marriott describes this:
Marriott’s immediate priority is supporting guests currently staying at Sonder properties and those with upcoming reservations. Marriott will be contacting guests who booked directly through Marriott channels, including marriott.com, the Marriott Bonvoy App and Marriott’s worldwide reservation centers, to address their reservation and booking needs. Guests who booked through a third-party online travel agency should contact those organizations. Marriott remains committed to minimizing disruption to guests’ travel plans.
Guests with questions about current or future reservations at a Sonder property booked through Marriott channels can contact Marriott customer service.
As a result of this, Marriott expects its net room growth for 2025 to be around 4.5%, compared to the previous forecast of 5%.
This termination is due to Sonder’s financial issues
Marriott has terminated its agreement with Sonder due to the company’s default. Interestingly, there’s not much else out there yet publicly about the default, but I’d imagine that there will be a bigger announcement soon. Presumably Marriott doesn’t want to end up being on the hook for any screw-up on Sonder’s part.
For context, Sonder was founded in 2014, but has been an absolute financial disaster. The company went public in 2021 with a valuation of around $2.2 billion, and now has a market value of around $7 million, so that’s quite a dip. The company had losses of over $250 million in 2020, and nearly $300 million in 2021.
It hasn’t gotten much better in recent times, with Sonder having recently postponed its shareholders meeting, as it hopes to get a deal with creditors.
Frankly I find it quite embarrassing that these properties only joined Marriott Bonvoy in the spring of this year, and just months later, the partnership is being terminated due to a default. It really shows how Marriott will partner with just about anyone.
Sonder’s financial situation was so dire that this outcome seemed inevitable. And now of course Marriott isn’t doing anything for those guests who have future bookings at a Sonder property, which is rather disappointing. So if you haven’t completed your stay, you’re out of luck.
Bottom line
Marriott and Sonder have terminated their agreement, just months after the properties were integrated into the Marriott Bonvoy portfolio. This comes as Sonder has reportedly defaulted, and is seemingly nearing liquidation.
The irony here is that Sonder was already on the verge of collapse back when the partnership started, so this isn’t a surprise. But that didn’t stop Marriott from encouraging its Bonvoy members to book these properties, only to now tell them “tough luck.”
What do you make of Marriott and Sonder ending their partnership?