Sonder tries Marriott partnership as strategy continues to shift

Marriott International has entered a long-term licensing agreement with Sonder Holdings to add over 9,000 apartment-style and boutique accommodations to its portfolio by the end of the year, with an additional 1,500 rooms in the pipeline, reports the Washington Business Journal. Financial terms were not disclosed, but Marriott will receive a royalty fee based on Sonder's gross room revenues. The new units will be branded as "Sonder by Marriott Bonvoy" and will be available in urban markets. Marriott anticipates full-year net room growth of up to 6.5% for 2024.

Sonder began by turning VC money into master leases in new construction, trucking in furniture, and renting the units as hotel-Airbnb mashups, although that strategy has shifted as the company has struggled. It has since gone public in a SPAC deal.

The agreement with Marriott follows a similar deal the world’s largest hotelier made with MGM Resorts International last year. Separately, Sonder has also secured $146 million in additional liquidity to shore up its balance sheet. The integration of Sonder properties into Marriott’s distribution platform is expected to be completed next year, allowing Marriott Bonvoy members to earn and redeem points at new locations.