The short-term rental market saw a major shake up this past week, as once $1.9 Billion valued, Marriott-backed hotelier Sonder announced the liquidation of its U.S. operations. This article breaks down Sonder's rise and dramatic fall, examines the real-world impact on stranded guests, and explores what opportunities it may have made for savvy Airbnb hosts and competitors ready to fill the void.
A Primer On Sonder
Sonder was a significant accommodation provider in some of the world's most traveled cities. The company, formerly partnered with industry giant Marriott, operates (or operated) hotels in 37 locations, across nine countries and three continents. It was founded over 10 years ago in 2014 and was founded in Montreal, Quebec.
Sonder was unique because of its hybrid approach to hospitality. The company's apartment-style accommodations offered hotel-like consistency and service within intimate, Instagram-worthy spaces in prime locations. Guests got more space and the feel of a real apartment plus perks rarely offered by typical Airbnbs.
What Happened to Sonder?
Sonder was able to survive lots over its decade-plus time in business. Even during COVID-19 shutdowns, the hotelier managed where many competitors failed. But now it's game over. What happened?
If you ask the company, they simply say “financial constraints”. But the real story is messier.
This collapse traces back to Sonder's aforementioned partnership with Marriott. A licensing agreement with Marriott's massive Bonvoy loyalty program gave the startup access to millions of potential customers for years. That ended on Sunday, November 9, 2025.
According to a press release, integration between Sonder's tech platform and Marriott's Bonvoy system never worked as planned. What was supposed to be a seamless booking experience turned into a technical nightmare. The company acknowledged that "unanticipated costs and operational challenges" plagued the partnership from the start, making it impossible to deliver the smooth customer experience both companies had promised.
This outcome wasn’t without signs - the most recent being a 90% post-pandemic IPO plunge in Jan 2022. Concerns persisted over opening months that the public didn't believe in their model. It's also never a good sign when your CEO steps down at the beginning of what was set to be a monumental deal with Marriott.
Sonder has struggled to find a way forward since. The company spent months trying to secure additional financing or find a buyer willing to take on the struggling business. But in today's tight credit market, nobody was biting. Investors had already poured millions into Sonder, and the appetite for throwing good money after bad simply wasn't there.
The final blow came on November 9th, when Marriott terminated the licensing agreement entirely. Without that partnership - flawed as it was - Sonder had no path forward. Within 24 hours, the company filed for Chapter 7 bankruptcy, triggering an immediate liquidation of its U.S. operations.
Impact On Guests
In an unusual response to its financial woes, Sonder abruptly evicted customers from properties with little or no notice whatsoever. As one could imagine, that made lots of people mad. Most of the flack has been on social media. Guests have nowhere to go than the internet in search of alternatives, advice, and emotional support.
The immediate impact lies of course in stranded travelers.
Thousands of guests found themselves locked out of properties they'd already paid for. Some only discovered the news only when room key codes stopped working. People who'd booked weeks or months in advance for business trips, family vacations, or relocations suddenly had nowhere to stay. In cities like San Francisco, New York, and Los Angeles where Sonder had a significant presence, guests were left scrambling in some of the most expensive hotel markets in the country.
Finding replacement accommodations on zero notice easily cost $300-500 per night. With the holiday travel season approaching, availability was already tight and prices inflated. Families planning Thanksgiving getaways or early holiday trips found themselves competing for whatever rooms were left, often at premium rates they couldn't afford.
Then there are the long-term implications.
Imagine prepaying for an entire stay to have those funds suddenly tied up in bankruptcy proceedings. Early reports suggest that getting money back won't be easy - Chapter 7 liquidations typically leave unsecured creditors (which includes guests) at the back of a very long line. Some savvy travelers immediately disputed charges with their credit card companies, but those who paid weeks or months earlier may have missed their chargeback windows entirely.
How to Make the Most of Sonder's Misfortune
As the investors who poured millions into Sonder stock stress over their pocketbooks, Airbnb hosts have an opportunity to profit. Just don't assume any unmet demand from the hotel chain's closure will make its way to your listing. Vacation accommodation remains a fiercely competitive landscape, even within the short-term rental community. So, how can you stand out to capture as much new business as possible?
We have a few tips:
1. Invest in Professional Photography That Showcases Design
Sonder built its brand on aesthetically pleasing, Instagram-worthy spaces with modern design sensibilities. If your listing photos look like they were taken on a flip phone in 2010, you're already losing the battle.
Hire a professional photographer to do your space justice. Lighting and composition go a long way in communicating value when selling something buyers can't truly experience until they arrive.
2. Cater to Business Travelers and Extended Stays
Sonder attracted guests who needed more than a hotel room but wanted hotel-like reliability.
That can look like lots of things in an Airbnb, like:
- Dedicated workspaces with a proper desks, ergonomic chairs, and good lighting
- Kitchens with more than a microwave and a single fork
- 'Extras' like laundry detergent, extra towels, and basic pantry staples
All small but noticeable details for someone staying a week or longer.
3. Maintain Consistency and Professionalism
One reason travelers chose Sonder over traditional Airbnbs was the promise of consistency - no surprises, no quirky house rules, no wondering if the place would match the photos. Deliver on that same promise by keeping your listing description accurate, responding to inquiries quickly, and maintaining your property to the exact standard shown in your photos. Create a streamlined check-in process with clear instructions, and consider a welcome guide that answers common questions before guests need to ask.
4. Milk Major Urban Markets
Sonder concentrated on high-demand cities like Toronto, San Francisco, New York, Los Angeles, and Chicago. If your property is in or near one of these markets, optimize your listing accordingly. Use keywords in your title and description that appeal to urban travelers ("downtown," "walkable," "near transit"). Price competitively but don't undervalue your space - former Sonder customers were paying premium rates for quality and convenience.
5. Highlight Reliability and Guest Protection
In the wake of Sonder's sudden collapse, travelers are understandably nervous about prepaying for accommodations. Address this anxiety head-on by emphasizing your track record. If you have dozens of five-star reviews, make sure they're prominently featured. Consider offering more flexible cancellation policies to build trust. Communicate clearly and promptly with potential guests to demonstrate that you're a reliable host who won't disappear overnight.
The key is understanding what Sonder did right - and then doing it better, with the personal touch and accountability that only an individual host can provide.
Sonder is merely one name in a sea of companies catering to big city travellers. Competitors can surely benefit monetarily from its closure - but the truly valuable takeaway is lessons learned.
Prime among them? Innovation and sleek branding mean nothing without financial fundamentals. Sonder's collapse illustrates the danger of building a business model that depends too heavily on external partnerships. Sustainable growth requires diversified revenue streams, manageable debt, and the ability to weather storms without a corporate life
