Name: Inside the Messy Sonder-Marriott Breakup That Left Guests Stranded
Uploaded: 2025-11-27T05:01:00Z
Duration: 6 min 20 s
Description: Hospitality startup Sonder promised hotel luxury at AirBnb prices. But guests found themselves locked out as the company abruptly shut down. Here's what went wrong.

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Hospitality startup Sonder promised hotel luxury at AirBnb prices. But guests found themselves locked out as the company abruptly shut down. Here's what went wrong. Photo Illustration: Josh Lisanby

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Hospitality startup Sonder promised hotel luxury at AirBnb prices. But guests found themselves locked out as the company abruptly shut down. Here's what went wrong.

Inside the Messy Sonder-Marriott Breakup That Left Guests Stranded

We just got evicted from our hotel here in Montreal.

Narrator: Last week, social media was flooded with scenes like these.

We checked in two days ago and we're getting evicted.

And they're saying basically that we need to move everything out with less than 24-hour notice.

Narrator: Sonder, a hospitality startup, told customers to pack up and leave their rooms as their partnership with hotel giant Marriott unraveled.

I tried contacting Sonder, but the line just beeped.

The collapse of Sonder was just so abrupt that guests literally had the rug pulled out from under them.

Narrator: The company, once worth nearly $2 billion, closed up shop almost overnight, leaving thousands of guests stranded. So, what went wrong?

The hospitality industry doesn't understand that the reason why people travel is so that they can get something that's different and unexpected.

Narrator: Sonder was the brainchild of Francis Davidson, who in 2012 was a college student in Montreal trying to sublet his apartment over the summer.

The problem that we noticed is that Montreal is a place that is incredible during the summer, so many people want to visit, but at the same time, there's thousands of apartments literally that are left empty during the summertime.

Narrator: After a few years of testing the idea and raising funding, Davidson and two co-founders officially launched the company in 2014. The vision was professionally-managed apartments with hotel-style service. Unlike traditional hotels, Sonder's business model didn't rely on the company owning real estate. Instead, it entered long-term leases with landlords to operate residential units as short-term rentals.

Client: This apartment was such a godsend for my stay in New York.

Narrator: Investors loved it. In 2021, the company projected nearly $4 billion in revenue by 2025. By the time the company went public in 2022, Sonder managed at least 7,600 units in 35 cities across 10 countries.

And it was also really concentrated in downtowns in London, Chicago, New York, and that was really great real estate where a lot of people wanted to stay. So a lot of investors and other people felt really confident that it could be successful in the long term.

Narrator: But Sonder was already running into operational challenges. Leasing apartments meant the company paid rent, furnished units, and kept cleaning and maintenance staff on payroll, whether rooms were booked or not. As the company expanded, the cost of leases outpaced revenue.

Part of what they did during COVID was to shift a little bit and try to have people staying for even longer. If you're renting for two months, you're probably not gonna pay quite as much per night as if you were just staying in a weekend hotel.

Narrator: To shore up their numbers, Sonder looked to the public markets for cash. To accelerate its IPO, the company went public via a SPAC, or Special Purpose Acquisition Company, which allows companies a faster, less regulated route to the public market, but with higher risks.

2021 was also a really hot time for the IPO market. A lot of companies were going public and investors felt really confident even about some companies like Sonder that had never turned a profit.

Narrator: But like many SPACs from the pandemic era, Sonder's market value soon collapsed.

Several months passed before the IPO actually closed, and it was a really disappointing IPO. Basically, all of the investors decided to cash in their stock rather than buy stock in the public company that Sonder had become. So that ended up in Sonder basically earning about 400 million less than they had expected.

Narrator: But in 2024, a lifeline came in the form of a licensing deal with Marriott International, one of the world's largest hotel chains. As part of the deal, thousands of Sonder units would appear inside Marriott's booking system. Despite the partnership, Sonder's financial problems continued. By 2025, the company's liabilities had outgrown its assets and posted a loss of about $100 million in a six-month window, according to an SEC filing. Then in June, Sonder's co-founder Davidson announced his departure from the company, writing on LinkedIn, "What unfolded over the following few years was far worse than anything we'd seen in historical data, or ever imagined was possible."

That summer, there were several more reports that indicated that Sonder was doing not well, and it said that it might run out of cash by the end of 2025.

Narrator: Sonder was reportedly seeking a buyer to go private, but when that bid fell through, Sonder defaulted on its debts to Marriott. Under the partnership terms, that allowed Marriott to end the agreement immediately. Marriott pulled the plug in November 2025, just over a year after announcing the partnership. In a statement, Marriott International said that its immediate priority is supporting guests currently staying at Sonder properties and those with upcoming reservations. With Sonder out of the picture, Marriott is now left to manage much of the fallout.

Sonder's going out of business, so they really don't care about customers, but Marriott is not going out of business.

Narrator: In the days after the shutdown, Sonder instructed employees to direct guests to Marriott with questions about their reservations and next steps.

Marriott said that it would refund everybody for their future reservations, and it was also handing out points, trying to help people find places to stay. But obviously, places were filling up really fast.

Narrator: In early November, right around the time Sonder's sale deal fell through, Marriott covered about $1.5 million in Sonder's payroll for one week, but turned down a later request for $50 million more. In the end, the partnership left Marriott out at least $15 million.

Sonder had a lot of red flags throughout its history as a company, so I think it really shows the importance of being aware of what a company's business model is and whether they can actually turn a profit in the long term.