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US: Sonder Holdings has announced it will “complete winding down operations immediately” and expects to initiate a Chapter 7 liquidation of its US business.
Earlier today, BHN reported that Marriott had terminated its licensing agreement with Sonder due to a default from Sonder.
The agreement, originally signed in 2024, planned to see more than 9,000 Sonder units join Marriott’s portfolio by the end of that year, with approximately 1,500 units to join its system in the future.
On Sunday, Marriott said the agreement is “no longer in effect due to Sonder’s default”. Sonder is no longer affiliated with Marriott Bonvoy, and Sonder properties are not available for new bookings on Marriott’s channels.
Now, Sonder has said the company faced “severe financial constraints arising from, among other things, prolonged challenges in the integration of the company’s systems and booking arrangements with Marriott”.
Following the termination, Sonder engaged “numerous strategic and financial parties” but was unsuccessful in reaching a viable going concern transaction for its business and operations, or in obtaining additional liquidity. The company’s board of directors have made “the difficult decision” to wind-down operations and pursue a court-supervised liquidation of the US business immediately.
“We are devastated to reach a point where a liquidation is the only viable path forward,” said Janice Sears, interim chief executive officer of Sonder. “Unfortunately, our integration with Marriott International was substantially delayed due to unexpected challenges in aligning our technology frameworks, resulting in significant, unanticipated integration costs, as well as a sharp decline in revenue arising from Sonder’s participation in Marriott’s Bonvoy reservation system. These issues persisted and contributed to a substantial and material loss in working capital. We explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.”
Marriott said its immediate priority is “supporting guests currently staying at Sonder properties” and will be contacting guests who booked directly through its channels. The company has encouraged those which have booked through third-party platforms to contact those organisations directly.
As a result of the termination, Marriott has adjusted its net rooms growth for 2025, which is now expected to approach 4.5 per cent – a reduction of about 45 basis points.
Highlights:
- Sonder Holdings will immediately wind down operations in the US and intends to pursue a Chapter 7 liquidation of its business.
- Marriott International terminated its licensing agreement with Sonder due to a default, which had originally planned to add over 9,000 Sonder units to Marriott’s portfolio, with 1,500 more units expected in the future.
- Sonder cited severe financial constraints arising from prolonged integration challenges with Marriott, leading to unexpected costs and a decline in revenue, which prevented a viable going-concern solution.
- Sonder is no longer affiliated with Marriott Bonvoy, and its properties are no longer available for booking on Marriott channels.
- Marriott has revised its 2025 net rooms growth forecast to approximately 4.5 per cent.
