On November 9, 2025, Marriott International announced the termination of its licensing agreement with Sonder Holdings Inc., ending the “Sonder by Marriott Bonvoy” collection that had been in place since August 2024. The agreement had promised to add more than 9,000 Sonder units to Marriott’s portfolio by year‑end, with an additional 1,500 units slated for future rollout. The termination means that all Sonder properties are removed from Marriott’s booking platforms, eliminating a critical distribution channel for the short‑term rental operator.
The loss of Marriott’s global reach and loyalty program is a severe blow to Sonder, which has been grappling with financial distress. In the fourth quarter of 2024, Sonder reported revenue of $161 million, a 2% decline YoY, and a net income of $31 million, largely driven by a favorable fair‑value adjustment on a forward contract. However, the company posted a net loss of $224 million for the full year and held only $72 million in cash and equivalents as of December 31, 2024. Concurrently, Sonder has been executing a portfolio optimization program that has reduced or exited many of its high‑cost properties, further tightening its balance sheet.
The default that triggered the termination stemmed from a combination of factors. Sonder’s financial position, marked by a shrinking cash reserve and rising debt, made it difficult to meet the contractual obligations tied to the Marriott partnership. Additionally, the company faced a Nasdaq deficiency notice in August 2025 for failing to file its quarterly report on time, highlighting ongoing compliance challenges. A CFO transition announced in August 2025 added further uncertainty to the organization’s leadership stability.
Marriott’s response to the termination focuses on guest continuity and portfolio management. The hotel chain has committed to contacting guests with current or upcoming reservations at former Sonder properties to ensure a smooth transition. In the wake of the removal, Marriott updated its 2025 net rooms growth forecast to approximately 4.5%, reflecting the loss of Sonder rooms from its inventory. The company’s strategy now emphasizes strengthening its core hotel portfolio and exploring new partnership opportunities to offset the gap left by Sonder.
Sonder’s CEO, Francis Davidson, had previously expressed optimism about the partnership in February 2025, noting the potential for “rapid integration with Marriott’s digital channels.” The abrupt termination signals a sharp reversal in that outlook, underscoring the company’s urgent need to secure alternative distribution agreements and reassess its growth strategy.
Investors are closely monitoring Sonder’s next steps, as the loss of Marriott exposure threatens to accelerate the company’s cash burn and could impact its ability to sustain occupancy levels. Analysts are watching for any new partnership announcements or cost‑cutting measures that could mitigate the revenue shortfall.
The termination also serves as a cautionary tale for other short‑term rental operators seeking large‑scale distribution deals. It highlights the importance of aligning financial health with contractual commitments and maintaining robust compliance practices to preserve strategic alliances.
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