Marriott’s overlooked warning signs in its partnership with Sonder

Why a low-cost inventory boost became a high-risk collapse for the world’s largest hotel chain

Dec 2, 2025

Marriott pursued a partnership with Sonder to cheaply expand its room count, even as the short-term rental company showed mounting financial distress. Sonder had long struggled with an unprofitable lease-driven model, inconsistent revenues, and repeated reporting delays that signaled deeper structural issues.

Despite these headwinds, Marriott moved forward—integrating Sonder’s units, providing emergency funds, and adjusting fee structures—only to see the company unravel within months. The abrupt shutdown left guests displaced, employees blindsided, and both companies entangled in bankruptcy court over unpaid obligations and unfulfilled commitments.

Key takeaways

Marriott proceeded despite clear financial red flags: The hotel chain saw the partnership as a low-cost way to grow inventory for investors, even as Sonder missed financial deadlines and repeatedly sought emergency cash.
Sonder’s business model was inherently unstable: High long-term lease liabilities paired with volatile short-term rental income created persistent operating losses.
The pandemic exposed and accelerated vulnerabilities: Covid-19 weakened urban demand where Sonder was concentrated, undermining revenue and pushing the company toward a risky SPAC listing.
Integration with Marriott strained Sonder’s cash flow: Moving from upfront guest payments to Marriott’s check-in model reduced liquidity and contributed to declining sales despite strong occupancy.
The collapse created widespread guest disruption: Marriott’s sudden request for guests to leave, combined with deactivated digital keys and unclear communication, caused confusion across multiple properties.
Employees were left without information or stability: Staff lost access to internal systems, saw channels shut down, and received termination notices as the shutdown unfolded in real time.
The legal fallout reflects deeper partnership tensions: Marriott alleges Sonder collected millions for reservations it could never honor and failed to plan an orderly wind-down, and is now seeking $17.7 million in claims.