Marriott International has abruptly ended its licensing agreement with Sonder Holdings Inc. due to Sonder’s default, further raising doubts about Sonder’s viability as a going concern.
Following the termination, Marriott announced that Sonder is no longer part of the Marriott Bonvoy program, and its properties have been removed from Marriott’s booking platforms.
With the removal of ~7,700 Sonder apartment-style rooms (142 properties) from Marriott’s system, Marriott’s net rooms growth for 2025 is now expected to approach 4.5% (reduced about 45 bps). There are no changes to the rest of the outlook metrics that Marriott provided on November 4, 2025.
Sonder signed an agreement with Marriott in 2024 and improved its liquidity by $146 million.
Marriott provided Sonder with $15 million of key money in two tranches (4Q24 and 2Q25) subject to various milestones being met. Given that Marriott noted the termination occurred due to Sonder's default, R.W. Baird analyst Michael Bellisario said they suspect Marriott will attempt to recover the unamortized portion of its key money investment.
As of 4Q24, Sonder by Marriott Bonvoy had 9,195 rooms (163 properties), according to Bellisario, with another ~1,500-2,000 rooms in the pipeline. Net deletions occurred in each of 1Q25, 2Q25, and 3Q25 as Sonder has been undergoing a portfolio optimization plan to reduce unprofitable leases.
In June, Co-Founder Francis Davidson in stepped down as CEO and as a member of the company's board of directors. CFO Michael Hughes departed in August.
Sonder agreed to go public in 2021 with a SPAC backed by billionaire investors Alec Gores and Dean Metropoulos and a $2.2 billion valuation in 2021. It is now reportedly valued at $6.8 million. More recently, it told the SEC it was concerned about its future.
Sonder in a Thursday SEC filing said its board had postponed to an undetermined date the company's annual meeting of shareholders, which had been scheduled for November 6. After the news broke, the stock plunged a further 26%.
By Jeffrey Weinstein
