(republished from an AI generated summary of the news)
On Sunday, November 9, 2025, Marriott International issued a press release announcing the immediate termination of its licensing agreement with Sonder Holdings Inc., effective right away due to Sonder’s default on the contract. The announcement was unexpected and came without prior warning to the public, leading to widespread disruption for travelers. Here’s a breakdown of the key details, based on Marriott’s official statement and immediate reactions from guests and analysts.
Background on the Partnership
- How it started: Marriott and Sonder announced a 20-year licensing deal in summer 2024, with early termination options after 5 years. This allowed Sonder—known for apartment-style, short-term rental properties with hotel-like check-ins (think Airbnb meets boutique hotel)—to operate under the “Sonder by Marriott” brand. Properties began integrating into the Marriott Bonvoy loyalty program in early 2025, letting guests earn points, elite night credits, and perks on stays.
- Scale: At its peak, this added thousands of units (over 9,000 expected by late 2024) to Marriott’s system, focusing on urban markets in North America, Europe, and the Middle East. It was positioned as an affordable, flexible option for Bonvoy members, with revenue per available room around $184 and 86% occupancy as of Q2 2025.
- Sonder’s struggles: Sonder has been financially precarious for years. It went public via SPAC in 2021 at a $2.2 billion valuation but now trades at under $7 million market cap. The company flagged “going-concern” risks in 2024 and recently postponed a shareholder meeting while negotiating with creditors. In August 2025, Marriott even provided a financial lifeline via a loan agreement to defer fees and help Sonder raise $32.5 million by mid-November—indicating deeper issues.
Why Did Marriott Pull the Plug So Suddenly?
- The trigger: Marriott cited a “default” by Sonder under the agreement’s terms, though specifics weren’t disclosed publicly. Possible breaches (based on the contract details) include:
- Failure to pay royalties or fees owed to Marriott.
- Non-compliance with “Collection Standards” (e.g., 40% or more of properties not meeting quality or operational benchmarks).
- Cross-defaults tied to the August 2025 loan, such as not securing the required funding by November 15.
- Timing: The move happened over the weekend, with the press release dropping on a Sunday morning (U.S. time). Sonder properties were delisted from Marriott’s website, app, and booking channels overnight, catching everyone off-guard. Analysts note this aligns with Sonder’s ongoing cash crunch—it’s essentially a distressed asset in a tough short-term rental market, where luxury demand is strong but budget options (like Sonder) lag.
- No mutual decision: This wasn’t an amicable split; it was Marriott exercising its termination rights unilaterally. Sonder hasn’t issued a public response yet, and its website briefly stopped taking reservations entirely.
Immediate Impacts
- On Marriott: The company revised its 2025 net room growth forecast downward from 5% to ~4.5%, as Sonder’s inventory (hundreds of properties) is now gone. However, Marriott says other financial outlooks (e.g., profit forecasts) remain unchanged, emphasizing strong overall demand.
- On Sonder: A massive blow—its stock (NASDAQ: SOND) is poised for a sharp drop when markets open Monday, with traders predicting it could hit $0.25. Without Marriott’s distribution and Bonvoy integration, Sonder loses a key revenue lifeline and credibility.
- On travelers: This is the biggest pain point. No new bookings are possible through Marriott, and existing ones are in limbo:
- Current stays: Some guests report being asked to vacate mid-stay (e.g., by Monday morning), with no on-site alternatives offered.
- Upcoming reservations: Marriott is emailing affected Bonvoy members with rebooking options at other properties (potentially at similar rates) or full refunds. However, complaints are flooding in about delays, lack of comparable options, and zero compensation for disruptions—like scrambling for last-minute hotels in high-demand cities.
- Real guest reactions on X (from November 9-10):
- One user was turned away at check-in for a two-week prepaid stay, forcing a bank dispute and no affordable alternative.
- Another, mid-stay in a property for weeks, demanded escalation for reimbursement after being told to leave.
- Broader frustration: “No loyalty from Marriott” and calls for boycotts.
