Inside Marriott’s Disastrous Bet on Short-Term Rental Company Sonder

Source: WSJ:

Published 13 min ago

Under Sonder’s licensing agreement with Marriott, all of its properties would be listed on the hotel company’s booking platform.

The investment added rooms for the hotel chain, but the apartment-rental firm collapsed under the high-cost leases. “Everything kind of went straight downhill,” said one manager.

For Marriott International, the $15 million deal seemed like a low-risk way to add 9,000 rooms to its global portfolio.

So in August of last year, the world’s largest hotel chain struck a licensing agreement with an upstart short-term rental company called Sonder, whose twist on Airbnb-style booking was to provide guests with hotel amenities at apartment-like units across three continents.

Marriott customers, who earned loyalty points by booking Sonder units, liked the option enough that a few thousand were settled into Sonder rooms on Nov. 9 when a puzzling email arrived from Marriott: “We are kindly requesting that you check out of the property as soon as you are able.”