Short-term rentals institution Sonder connected Monday said it plans to record for bankruptcy, a time aft Marriott International said a licensing statement betwixt the 2 companies had ended.
The deal, signed successful August 2024, allowed Sonder hotels to beryllium booked via Marriott's Bonvoy website and was wide considered a lifeline for the San Francisco-based company, which struggled financially done the Covid-19 pandemic, and aft going nationalist via a SPAC merger successful 2022.
In a statement published Sunday, Marriott said the 20-year licensing statement was "no longer successful effect," citing Sonder's "default" arsenic the reason.
In its ain connection connected Monday, Sonder said it made "comprehensive efforts" to amended the company's finances pursuing Marriott's announcement, to nary avail.
"In airy of these unsuccessful efforts and [Sonder's] fiscal condition, the Board of Directors made the hard determination to wind-down operations and prosecute a court-supervised liquidation of the U.S. concern immediately," the statement read.
Janice Sears, Sonder's interim main enforcement officer, said method integration problems with Marriott's Bonvoy website caused "significant, unanticipated integration costs, arsenic good arsenic a crisp diminution successful revenue".
"We are devastated to scope a constituent wherever a liquidation is the lone viable way forward," Sears added.
The one-time unicorn, which was valued astatine $1.9 cardinal astatine its IPO, said it plans to record insolvency proceedings overseas too.
The company, which operates successful 40 cities worldwide, was billed arsenic a blend betwixt Airbnb and hotels, offering semipermanent stays successful tech-enabled properties fashionable with distant workers. The institution operated galore hotels via semipermanent leases, resulting successful an "asset-heavy" strategy that galore successful the hospitality abstraction present avoid.
'People were scrambling'
Sonder edifice guests that CNBC spoke to said they were caught off-guard by the news, with immoderate saying they were ordered to vacate their edifice rooms with little than 24 hours' notice.
One traveler, Connie Yang, told CNBC that she pre-paid for a enactment astatine Sonder Battery Park successful New York from Nov. 7 to Nov. 17.
On Sunday, Nov. 9, she received an email saying she had to vacate the edifice by 9 a.m. the adjacent day, she said.
"The crushed stated was the extremity of a licensing statement betwixt Sonder and Marriott," she said. "The full gathering was asked to vacate."
"My neighbour is helping her hubby done crab therapy, and they person paid for the month," she added. "It is beyond comprehension."
She besides recounted uncovering immoderate of Sonder's onsite unit successful tears arsenic "they knew nothing."
On Monday morning, "people were scrambling to permission earlier they locked down the building," she said.
Other travelers person posted stories connected societal media astir Sonder's shuttering, including attempts to get assistance from Marriott's lawsuit service.
Yang said she besides contacted Marriott. "I called Marriott and spoke with [a] supervisor who said they were not allowed to springiness america amended rates… nor were they going to find america rooms," she said. "We were each near to scramble."
Marriott did not instantly instrumentality CNBC's petition for comment.
A company statement connected Sunday said Marriott's "immediate precedence is supporting guests presently staying astatine Sonder properties and those with upcoming reservations," adding that Marriott volition scope retired to guests "who booked straight done Marriott channels."
Yang, who booked her enactment done Booking.com, said that a typical astatine the level "assured maine I would get a refund."
In the end, she said she recovered an alternate accommodation connected her ain — astatine a "Hilton."
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