Marriott International severed its licensing agreement with STR company Sonder over the weekend, citing the company's default on financial obligations and triggering a swift collapse that will see Sonder file for bankruptcy.
The termination, announced Sunday, immediately cut off Sonder properties from Marriott's Bonvoy booking platform and triggered fallout for guests and employees.
At the Sonder-operated Witherspoon building in Center City Philadelphia, guests received less than 24 hours' notice to vacate by 9 a.m. Monday morning, creating chaos for travelers with confirmed reservations. On social media, employees reported learning of their layoffs from news reports rather than internal communication.
Sonder announced Monday it would "complete a wind-down of operations," declaring bankruptcy in the U.S. and insolvency overseas. The company, which employs approximately 1,400 people across 35 cities in 10 countries, said it made "comprehensive efforts" to find financing alternatives or execute a sale but ultimately couldn't secure the liquidity needed to continue operations.
The partnership's dissolution marks a dramatic reversal for what was initially hailed as a lifeline. When Marriott and Sonder signed a 20-year licensing agreement in August 2024, Sonder's stock soared. The deal was supposed to enhance Sonder's liquidity by about $146 million and promised to bring over 9,000 apartment-style units into the Marriott system by year's end.
However, the relationship quickly soured. Sonder blamed "severe financial constraints arising from, among other things, prolonged challenges in the integration of the company's systems and booking arrangements with Marriott International," according to a company statement. Both Sonder's CEO and CFO had already departed earlier this year, and the company had fallen into a pattern of filing earnings reports late amid mounting liquidity concerns.
The bankruptcy marks another casualty of the SPAC boom that peaked five years ago. Sonder had merged with a blank-check firm backed by billionaires Alec Gores and Dean Metropoulos at a $2.2 billion valuation in 2021. By late 2025, filings with the SEC showed the company’s valuation had plummeted to just $6.8 million.
Marriott, meanwhile, appears positioned to weather the partnership's failure relatively unharmed. The company reduced its 2025 net room growth forecast to approximately 4.5% from 5%, reflecting the removal of roughly 7,700 Sonder rooms across 142 properties. No other outlook metrics changed from Marriott's November 4 forecast.
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