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- Sonder has filed for bankruptcy after Marriott ended its licensing agreement.
- The short-term rental firm filed for Chapter 7 liquidation proceedings.
- The Sonder-Marriott fiasco has sparked chaos and confusion for guests.
Hospitality company Sonder has officially filed for bankruptcy following the collapse of its partnership with hotel giant Marriott International.
The San Francisco firm, which operated thousands of short-term rental units, including apartment-style and boutique hotel accommodations around the globe, filed for Chapter 7 liquidation proceedings in federal bankruptcy court in Delaware on Friday.
In a legal filing, Sonder listed its estimated assets as between $1 billion and $10 billion and its estimated liabilities as between $1 billion and $10 billion.
Sonder announced its bankruptcy plans earlier this week, saying it would immediately wind down its US operations after Marriott abruptly ended its licensing agreement with the company — a move that sparked chaos and confusion for blindsided guests.
In announcing its plans to file for Chapter 7, Sonder also said it would “initiate insolvency proceedings” in other countries where it operates.
Sonder, a firm once valued at over $1 billion, said it “faced severe financial constraints arising from, among other things, prolonged challenges in the integration of the Company’s systems and booking arrangements with Marriott International.”
The short-term rental company said it “made comprehensive efforts to evaluate all financing and other strategic alternatives, including a sale of its business and operations, to improve its financial condition,” but was “unable to execute a viable going concern transaction for its business and operations or obtain additional liquidity.”
In addition to managing properties, Sonder — which launched in 2014 — also offered travelers an online platform to book stays at those properties.
Marriott signed its long-term licensing agreement with Sonder in August 2024, prompting Sonder to rebrand as Sonder by Marriott Bonvoy.
On Sunday, the hotel chain announced that the agreement had been terminated due to “Sonder’s default.”
“As a result, Sonder is no longer affiliated with Marriott Bonvoy, and Sonder properties are not available for new bookings on Marriott’s channels,” Marriott said.
This led to the cancellation of travellers’ current reservations and future bookings.
Read the original article on Business Insider
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