Getting Sondered
Marriott screws its guests as its short-term rental partner files bankruptcy
“Sonder: The awareness that everyone has a story.” – The Dictionary of Obscure Sorrows
As a noun, Sonder is a slang term for empathy. It’s “the awareness that other people all have their own complex set of feelings and experiences,” according to Merriam Webster.
As a verb, it means kicking guests out of hotel rooms and canceling their long-planned vacations. It also means stiffing property owners, lenders, investors and business partners while running off with a fat corporate severance package.
Francis Davidson, founder and CEO of San Francisco-based short-term rental company, Sonder Holdings, brought this new meaning to the word.
On June 24, Davidson left Sonder with a $2.2 million cash severance package, according to a regulatory filing. On Monday, less than five months later, the Airbnb rival announced it was shutting down after filing for a Chapter 7 bankruptcy liquidation.
As is the custom in Corporate America, Davidson flew into the wild blue yonder while everybody else got sondered.
On top of his millions, Davidson got an additional $32,730.51 to pay for health care. (Suck on that all you Obama Care beggars.) He also got another $15,000 to handle administrative fees involved in managing this agreement. (What? Make the CEO pay his own fees?)
Sonder’s guests got kicked to the curb. Marriott abruptly canceled its licensing agreement with Sonder, claiming the company defaulted on the deal. Then Marriott kicked many of its guests to the curb as well – essentially defaulting on them like a deadbeat corporation.
Headlines scream this week about Marriott and Sonder leaving guests homeless with unexpected notices to vacate. (And to think they were worried about flights in a government shutdown.)
Sonder touts 9,000 properties in 40 cities on its website. It had planned to integrate 9,000 more through its licensing deal with Marriott announced in August 2024.
“With the planned addition of Sonder by Marriott Bonvoy, we will be able to provide guests seeking apartment-style urban accommodations with even more options in the Marriott Bonvoy portfolio,” Marriott executive Tim Grisius crowed in a press release.
“Sonder by Marriott Bonvoy” now means “Screwed by Marriott Bonvoy.”
One guest told Business Insider he came back to the Boston apartment he’d booked to find his luggage and personal items packed. Some of it thrown in plastic bags. All of it stacked in the hallway.
Others complained of being locked out. Others said they spent hundreds or thousands of dollars more to find last-minute accommodations. Some said they plan on saying bon voyage to their Marriott Bonvoy membership.
Who taints an iconic name in the hospitality industry by partnering with an overextended, short-term rental company? Marriott has been in the business since 1927. Someone there should have known better.
WeDon’tWork
Sonder was originally founded in 2014 as Flatbook, and the discarded name still fits.
The company went public at about $9 a share in January 2022 through a sketchy SPAC merger. It’s now trading for about 13 cents. Sonder’s market value once hit $2.2 billion. It’s now worth about what it costs for a one-night stay at a Motel 6.
It’s a WeWork debacle all over again only with apartments and hotel rooms instead of office space.
In both cases, young and overconfident entrepreneurs leased more properties than they could sublet. Then they were laid flat by the lease payments.
In both cases, the companies skirted scrutiny by merging with a SPAC, or Special Purpose Acquisition Company. A SPAC merger is really just a sneaky way for speculative companies to avoid a more rigorous initial public offering process.
WeWork went public through a SPAC deal in October 2021 and filed bankruptcy in November 2023.
Insiders and early investors scored big. Everyone else got sondered … which now means quite literally kicking customers to the curb.
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