Marriott International announced Sunday that its licensing agreement with short-term rental specialist Sonder Holdings has ended because of a default on Sonder’s part.
The statement added that Sonder "is no longer affiliated with Marriott Bonvoy and Sonder properties are not available for new bookings on Marriott’s channels."
In a separate statement on Monday, Sonder announced plans to "complete winding down operations immediately" and initiate a Chapter 7 liquidation of its U.S. business. The company cited "severe financial constraints" resulting from "prolonged challenges in the integration of the company's systems and booking arrangements with Marriott International." Sonder said details about the liquidation of its operations outside of the U.S. will be announced at a later date.
The companies initially announced their "long-term strategic licensing agreement" in August 2024. The move saw more than 9,000 Sonder units join the Marriott portfolio by the end of that year. A further 1,500 units were also expected to join the Marriott system going forward.
Sonder's properties, including boutique hotels and apartment-style accommodations, were to be integrated into Marriott's distribution channels, as well as be available to book on its website and loyalty program mobile application under the banner Sonder by Marriott Bonvoy.
The deal was seen as somewhat of a lifeline for Sonder, which had risked being delisted from the Nasdaq several times and was forced to cut its workforce by more than a third.
In the release announcing its closure, Janice Sears, interim CEO of Sonder, said that the company is "devastated" by the decision.
"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," Sears said.
"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."
Ahead of Sonder's announcement, hospitality executives commented on the end of the deal on LinkedIn.
"Marriott wanted reach. Sonder needed credibility. Then the math stopped working," Louis-Hippolyte Bouchayer, head of lodging strategy and supplier management for SAP Concur, wrote.
"Liquidity warnings. Delayed filings. Deferred fees. And suddenly, the asset-light romance turned asset-flight."
Pedro Colaco, CEO of Guestcentric said that every strategic deal "hides a dependency risk."
In October, Sonder published its second quarter financial results revealing a revenue of $147 million, down 11% year over year. Bookable nights decreased 21% to 798,000 year over year. Net loss for the company was $44.5 million, a 236% decrease year over year. The company said it had 8,300 live units as of June 30, 2025.
Marriott said in its statement that it will be contacting guests who booked Sonder properties directly through Marriott channels "to address their reservation and booking needs."
This story has been updated to include information on Sonder's closure plans.