Sonder, once a high profile hospitality startup promising a tech enabled alternative to hotels, has entered liquidation after a failed attempt to scale an asset heavy model and a collapsed partnership with Marriott. Its downfall highlights the risks of branding operationally intensive real estate businesses as tech companies, the difficulty of integrating with legacy hotel systems, and a broader investor shift toward sustainable, asset light or hybrid hospitality models.
Main takeaways
- Sonder tried to combine Airbnb style apartments with hotel like standards, using a mobile first, digital check in experience to promise consistent, apartment style stays.
- The company grew quickly, went public via a SPAC in 2022 at about 2.2 billion dollars, and expanded across North America and Europe, but its model was capital intensive and operationally complex.
- By 2024, losses were mounting, revenue lagged behind obligations, staff turnover was high, and investor confidence eroded, eventually leading to a Nasdaq delisting.
- A 2025 licensing agreement with Marriott, to create Sonder by Marriott and plug into Marriott distribution and loyalty, was seen as a lifeline worth up to 126 million dollars in liquidity.
- Integration with Marriott technology proved more expensive and difficult than expected; delays and cost overruns cut revenue and increased expenses, and Sonder defaulted on obligations.
- Marriott terminated the partnership in November 2025 to protect its own brand and finances, removing Sonder’s last major support.
- Sonder filed for Chapter 7 bankruptcy in the United States and insolvency abroad, began winding down operations, and abruptly asked guests to leave properties, causing disruption and last minute relocation issues.
- Employees face mass layoffs with limited clarity on severance or benefits, while customers with future bookings are dealing with cancellations and uncertain refunds.
- Property owners and landlords are left with vacant, furnished units and unpaid leases, highlighting the risk transfer embedded in Sonder’s lease based, asset heavy model.
- Analysts compare Sonder to WeWork: both presented themselves as tech platforms while carrying large real estate and operating commitments, unlike Airbnb’s asset light marketplace model.
- The collapse underlines the limits of tech washing: businesses that are fundamentally operational must show financial discipline, realistic unit economics, and resilience, not just a digital front end.
- The case also shows how difficult it is for tech branded players to integrate with legacy hotel systems, where technology, distribution, and operations must align closely.
- For investors and founders in hospitality, there is now greater caution toward capital intensive disruptors and more scrutiny on paths to profitability rather than growth alone.
- Sonder’s website still resolves but redirects to Marriott hotel search results, and the future of the individual properties and the Sonder brand remains unclear and appears bleak.
- Looking ahead, the industry is likely to favor hybrid and asset light models that balance technology with prudent asset management, focusing on sustainable growth and adaptability in volatile markets.
