Sonder Closes Monday, Evicts Guests from Hotels | Business News
Sonder, a prominent short-term rental company, announced its shutdown earlier this week, impacting guests across the United States. This closure followed the termination of its licensing agreement with Marriott, which cited a default on the terms. Sonder’s abrupt exit on Monday marks a significant downturn for the once-flourishing company.
Sonder’s Demise: Key Events and Impact
Founded as a high-end alternative to Airbnb, Sonder was a major player in the short-term rental market, especially in New Orleans. At its peak, the company managed over 700 rentals in the city. However, this number has drastically dropped to approximately 200 in recent years.
Termination of Agreement with Marriott
- Marriott ended its licensing agreement with Sonder, citing default on the terms.
- The agreement allowed Sonder to operate under the Marriott Bonvoy brand.
- This partnership was expected to enhance Sonder’s business prospects.
Guest Evictions and Property Shutdowns
The shutdown affected multiple properties, including smaller rental options like The Schaeffer and The Louie. Notices were posted on the affected properties’ websites, informing guests of the cancellation and the end of the Marriott partnership. Many guests found themselves needing to vacate their accommodations abruptly.
Sonder’s Financial Struggles
Sonder has faced ongoing financial difficulties, particularly since its public listing in 2022. Although it was valued at over $1 billion in 2019, profitability remained elusive, particularly as the travel industry struggled to recover post-pandemic. The company’s recent challenges culminated in its plan to file for Chapter 7 bankruptcy, marking an end to its operations.
Executives’ Statements and Future Outlook
Janice Sears, Sonder’s interim CEO, attributed the company’s failure to delays in integrating with Marriott’s technology, rising costs, and decreased revenues. In her statement, she expressed regret over resorting to liquidation as the sole option to proceed.
Impact on Employees and Local Businesses
- Sonder’s closure has led to layoffs for many employees.
- Hospitality partners, who had been reliant on Sonder, are now navigating uncertain futures.
The local tourism marketing agency, New Orleans and Co., did not respond immediately regarding the implications of Sonder’s shutdown. As the hospitality landscape shifts, the broader impact on short-term rentals in New Orleans remains to be seen.
