Founded in 2014 at the ascent of the vacation rental company market, Sonder Holdings at one point managed over 9,000 apartments and homes in 40 countries around the world as it expanded beyond its origins in Montreal and eventually moved its headquarters to San Francisco.
At one point marketed as a more boutique and upscale version of Airbnb, Sonder just announced that it is filing for Chapter 7 bankruptcy. Contrary to Chapter 11, this type of bankruptcy skips over the step of requesting time to restructure finances to go straight to liquidation. In Sonder’s case, it came one day after Marriott pulled out of its licensing agreement over the poor state of its finances and challenges integrating their booking systems. Signed in 2024, the agreement to use the Marriott name was initially signed for the next two decades.
“Liquidation is the only viable path forward” for Sonder, execs say
“We are devastated to reach a point where a liquidation is the only viable path forward,” Sonder’s Chief Executive Officer Janice Sears said in a statement. “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.”
Guests at various Sonder properties around the U.S. have reported various states of chaos as some were told to immediately vacate properties they had booked months ago and had already checked into. In some cases, customers were locked out of apartments.
Related: Ritz resort owner files Chapter 11 bankruptcy to save project
“I’m here because I’m working in Philly,” Mickey Silver, who booked an apartment at The Witherspoon building in Philadelphia for a long-term stay of five months, said to a local news outlet. “Because of the electronic codes, we’re scared we can’t get back in the building. I’m lucky I have a friend who can help drive me out.”
Other Sonder customers in Philadelphia a “terrible upheaval” as they had to book last-minute hotels at prices that doubled from the rush of travelers having to do the same.
Marriott pulled a 20-year licensing agreement with Sonder that it signed in 2024.
Image source: HWall/Shutterstock
“We are not happy”: Customers left to book last-minute hotel rates
Tim Schaefer, a blogger who booked two apartments in New York City for a total of 10 days, told Business Insider that he received an email saying that his reservation was canceled an hour before he was supposed to check in on Nov. 9.
“We have a high loyalty status — Platinum Elite — with [Marriott Bonvoy], we are not happy,” Schaefer described. But as Marriott pulled its licensing agreement, it is no longer taking responsibility for stays booked through Sonder.
More on travel:
- Major airline launches surprising flight between Las Vegas and Paris
- United Airlines CEO gives stark warning on Olympic Games
- The highest rooftop in Barcelona is in a surprising place
- US government issues sudden warning on Switzerland travel
Marriott could not be reached for comment while Schaefer said he spent over an hour on hold through the chain’s help line without being able to reach someone who could help.
NYU luxury marketing instructor David Klingbeil also said he received a Sunday night email about having to leave a property he booked for the next two weeks to teach a course by 8 a.m. on Monday.
“I didn’t believe it when I saw the email, I had to check that this wasn’t a phishing attempt or something,” Klingbeil told Business Insider.