Staff Reports
In a dramatic turn of events, guests of the hospitality startup Sonder found themselves scrambling to pack their bags in Montreal, as the company abruptly evicted them from their hotel rooms, leaving many feeling abandoned and confused. With less than 24 hours’ notice, customers were informed that they needed to leave due to the unraveling of Sonder’s partnership with hotel giant Marriott. This situation highlighted the downfall of a company that once boasted a valuation of nearly $2 billion, but which closed its doors almost overnight, stranding thousands in the process.
Sonder was founded by Francis Davidson in 2014, inspired by the myriad of vacant apartments in Montreal that he noticed while attending college. The goal was simple yet ambitious: to offer professionally managed apartments equipped with hotel-style amenities. Unlike traditional hotels, Sonder didn’t buy real estate but instead leased units from landlords, transforming them into short-term rentals. This model attracted heaps of investor interest, especially when the company projected soaring revenues in the coming years. At its peak, Sonder operated over 7,600 units across 35 cities and 10 countries, catering to tourists eager for a different travel experience.
However, the tides began to turn as operational issues plagued the company. Leasing meant that Sonder was tied to hefty monthly rents and the costs associated with maintaining the properties, regardless of how many guests booked stays. As the pandemic shifted travel patterns, Sonder tried to adapt by promoting longer stays, but this only compounded their financial woes. Despite optimism surrounding their initial public offering (IPO), the market took a nosedive, leading to a disappointing debut that left Sonder’s valuation in tatters.
In a last-ditch effort to rescue the sinking ship, Sonder struck a deal with Marriott in 2024, allowing their units to be integrated into the Marriott booking system. But even the collaboration couldn’t stem the financial bleeding. By 2025, the company was deeply in the red, reporting losses of around $100 million in just six months. This dire situation led Davidson to make the tough decision to leave the company, openly acknowledging that the downward spiral was far worse than anyone could have anticipated.
Ultimately, the partnership failed to provide the lifeline Sonder desperately needed. When it became clear that the company might run out of cash, Marriott was forced to end its agreement in November 2025, just a year after the partnership began. While Marriott took steps to support affected guests, including offering refunds and points to help find alternative accommodations, the fallout for Sonder was severe. It serves as a potent reminder of the importance of a sound business model and the need for companies to manage risk carefully, especially in uncertain times. As Sonder fades into the annals of business cautionary tales, travelers can only hope for a smoother journey ahead in the world of hospitality.
