The “Unexpected” Bankruptcy of Marriott Partner Sonder Is No Surprise — But It’s a Friendly Reminder That Brands Are No Guarantee

In summer 2023, I booked a room at a hospitality upstart promising to shake up the short-term rental space with apartment-style hotels, thinking it’d make for an interesting story. Instead, I got way more than I bargained for.

Minutes after checking into a Sonder in New York, I walked into a humid, dirty room with what appeared to be mold on the ceiling — and after asking to switch rooms, I was met with rude support reps, yelled at, and remotely locked out of my room.

At the time, I wondered if this was just a one-off — but as I began digging, I found plenty of frustrated travelers. Incredibly, attempts to share my experience with management were denied — they did not care.

And after a read of the public firm’s filings, I found out why: the world’s “largest short-term rental” company was busy prepping parachutes for executives, facing claims of unpaid rent at several properties, and being sued over a Legionnaires’ disease outbreak tied to one of its New York buildings.

Thanks for nothing: I spent weeks trying to get my money back through a credit card dispute and eventually put it on the back burner. Sonder wasn’t an isolated case, either — in 2024, we highlighted some of these problems in a markets-focused cautionary tale about hospitality upstarts. But Marriott apparently missed the red flags and, for some reason, decided to partner with the financially ailing brand the following summer — a decision that led to untold levels of chaos and unnecessary traveler pain this week.

• Sonder filed for bankruptcy after Marriott terminated its partnership, laying off staff and forcing travelers to vacate rentals immediately.
• Even though Marriott was managing bookings, many travelers were left stranded because Sonder didn’t own the buildings and hadn’t been paying rent.

Who’s to Blame?

There’s been an exchange of words over whose fault this is — Marriott says they ended the partnership because Sonder told them they were filing for bankruptcy, while Sonder blames the cost of integrating with the company. I’d make the case that none of that really matters:

• Sonder may have made service improvements in recent years to justify a partnership, but the business was poorly run, christened with credibility from Marriott, who, in turn, helped fuel an “FTX for Hotels” moment.
• Arguably worse, Marriott knew the risks, accepted them, and then left it to their customers without warning — now urging them to shake down their creditors and book a new hotel at a higher rate.

Low trust travel: It shouldn’t be that you have to do due diligence on travel plans in the way you would on a stock, but maybe brands mean nothing — expectations are on the floor for major travel brands, and guarantees are no longer guaranteed. In fact, a new elite benefit just dropped: You might get kicked out of your room — or never get one at all.

Beware of spin factor: Let’s be real — this is shameful, and brands shouldn’t feign ignorance. This should’ve been obvious to the adults in the room at Marriott — just as obvious as it was on Sonder’s balance sheet. And Sonder’s cofounder, who resigned in June with a $2.2M+ golden parachute, now says he’s “shocked”? You have to wonder what the CFO — who resigned Aug. 8 — thinks about all this.