Sonder Holdings Inc. announced on November 10, 2025 that it would file for Chapter 7 liquidation of its U.S. business and initiate insolvency proceedings in other jurisdictions, following the termination of its licensing agreement with Marriott International on November 9, 2025. The filing marks the end of Sonder’s attempt to scale through a partnership with the world’s largest hotel chain.
The Marriott agreement, announced in August 2024, was intended to place Sonder’s 7,700 rooms on Marriott’s booking platform and integrate the two companies’ technology stacks. Integration delays, unexpected technology alignment costs, and a sharp decline in revenue from the Bonvoy channel forced Sonder to default on the agreement. Janice Sears, Sonder’s interim CEO, said the company faced a “substantial decline in revenue” and a “material loss in working capital” that made continued operation unsustainable.
Sonder’s financial performance in the months leading up to the filing underscored the severity of the situation. In the first half of 2025 the company posted a $101 million net loss, with a $44.5 million loss in Q2 alone—a 236 % year‑over‑year drop. Revenue fell 11 % to $147.1 million in Q2, compared with $161 million in Q4 2024, and the company’s net loss widened to $224 million for the full year 2024, a 24 % improvement from the previous year but still a significant deficit. Operating margins slipped to –22 % in Q2, reflecting the cost burden of the failed integration and the loss of Marriott‑driven revenue streams.
Sears explained that the integration challenges were “unexpected” and that the costs associated with aligning technology frameworks were far higher than projected. The company had also incurred significant one‑time charges related to the termination of the Marriott agreement, including contract penalties and the write‑down of assets tied to the partnership. These factors combined to erode working capital and forced the company to seek liquidation as the only viable path forward.
The liquidation will affect a broad range of stakeholders. Employees will be laid off, customers with existing reservations will need to find alternative accommodations, and creditors will face claims against a shrinking asset base. Lease obligations for the company’s portfolio of short‑term rental properties will be renegotiated or terminated, and the broader short‑term rental market may see a temporary reduction in inventory as Sonder’s properties are sold or re‑leased.
The market reacted sharply to the filing. Shares of Sonder fell more than 60 % on the day of the announcement, trading at $0.19 on November 11, 2025, down from $0.52 the previous day. The steep decline reflected investors’ assessment that the company had no viable path to profitability and that the loss of Marriott’s distribution network had eliminated a key growth engine.
The collapse of Sonder highlights the risks inherent in asset‑heavy hospitality models that rely on large partnership agreements. It also underscores the importance of robust technology integration plans and liquidity buffers in the short‑term rental sector, where rapid changes in consumer demand and competitive dynamics can quickly erode margins.
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