Sonder announces bankruptcy plans, reportedly tells guests to vacate hotel rooms

Sonder announced on Monday, Nov. 10, that it planned to file for bankruptcy, only a day after Marriott International said it ended a licensing agreement with the short-term rental company.

Sonder said in a news release that it made efforts to improve its finances following the Marriott announcement but fell short, prompting the company to “initiate a Chapter 7 liquidation.”

“In light of these unsuccessful efforts and (Sonder’s) financial condition, the Board of Directors made the difficult decision to wind-down operations and pursue a court-supervised liquidation of the U.S. business immediately,” the company said.

The move comes after Sonder and Marriott in August 2024 signed a licensing deal that allowed Sonder hotels to be booked via Marriott’s Bonvoy website, according to CNBC and The New York Times. But that deal was ended with an announcement from Marriott on Sunday, Nov. 9.

Sonder hotel guests were left searching for housing on Sunday, after being told they had to leave their rooms within the next 24 hours, according to CNBC. One guest, Connie Yang, told the outlet that her prepaid stay in New York from Nov. 7 to Nov. 17 had been canceled.

“People were scrambling to leave before they locked down the building,” she said.

Juan Ávalos Méndez, another guest staying at a hotel run by Sonder, told the Times that he was three days into a 12-day trip to Amsterdam when, on Nov. 10, he woke to find a letter had been slipped under his door. The letter said the hotel was closing, and he needed to check out by 11 a.m.

Another guest, Joan Lee, told the Times that Marriott did not offer “any real solution” after the cancellation of her four-night stay. She and her husband were set to stay at an apartment in Rome after Christmas.

“It was disappointing,” Lee, 42, said. “My husband is already a little iffy on Airbnbs, and so what we liked about this was that it had the Marriott brand attached to it.”

In a Nov. 9 news release, Marriott said the deal ended due to “Sonder’s default,” explaining that “Sonder is no longer affiliated with Marriott Bonvoy, and Sonder properties are not available for new bookings on Marriott’s channels.”

In Sonder’s news release, interim CEO Janice Sears claimed that problems with Marriott Bonvoy’s website’s integration with Sonder caused the company to lose out on funds.

“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,” Sears said.