Sonder, once a high profile hospitality startup promising a tech enabled alternative to hotels, has entered liquidation after a failed attempt to scale an asset heavy model and a collapsed partnership with Marriott. Its downfall highlights the risks of branding operationally intensive real estate businesses as tech companies, the difficulty of integrating with legacy hotel systems, and a broader investor shift toward sustainable, asset light or hybrid hospitality models.

Main takeaways

  • Sonder tried to combine Airbnb style apartments with hotel like standards, using a mobile first, digital check in experience to promise consistent, apartment style stays.
  • The company grew quickly, went public via a SPAC in 2022 at about 2.2 billion dollars, and expanded across North America and Europe, but its model was capital intensive and operationally complex.
  • By 2024, losses were mounting, revenue lagged behind obligations, staff turnover was high, and investor confidence eroded, eventually leading to a Nasdaq delisting.
  • A 2025 licensing agreement with Marriott, to create Sonder by Marriott and plug into Marriott distribution and loyalty, was seen as a lifeline worth up to 126 million dollars in liquidity.
  • Integration with Marriott technology proved more expensive and difficult than expected; delays and cost overruns cut revenue and increased expenses, and Sonder defaulted on obligations.
  • Marriott terminated the partnership in November 2025 to protect its own brand and finances, removing Sonder’s last major support.
  • Sonder filed for Chapter 7 bankruptcy in the United States and insolvency abroad, began winding down operations, and abruptly asked guests to leave properties, causing disruption and last minute relocation issues.
  • Employees face mass layoffs with limited clarity on severance or benefits, while customers with future bookings are dealing with cancellations and uncertain refunds.
  • Property owners and landlords are left with vacant, furnished units and unpaid leases, highlighting the risk transfer embedded in Sonder’s lease based, asset heavy model.
  • Analysts compare Sonder to WeWork: both presented themselves as tech platforms while carrying large real estate and operating commitments, unlike Airbnb’s asset light marketplace model.
  • The collapse underlines the limits of tech washing: businesses that are fundamentally operational must show financial discipline, realistic unit economics, and resilience, not just a digital front end.
  • The case also shows how difficult it is for tech branded players to integrate with legacy hotel systems, where technology, distribution, and operations must align closely.
  • For investors and founders in hospitality, there is now greater caution toward capital intensive disruptors and more scrutiny on paths to profitability rather than growth alone.
  • Sonder’s website still resolves but redirects to Marriott hotel search results, and the future of the individual properties and the Sonder brand remains unclear and appears bleak.
  • Looking ahead, the industry is likely to favor hybrid and asset light models that balance technology with prudent asset management, focusing on sustainable growth and adaptability in volatile markets.

Read the full article at DSCENE

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