Marriott International, Inc. has announced that its licensing agreement with Sonder Holdings Inc. is no longer in effect due to Sonder's default.
As a result, Sonder is no longer affiliated with Marriott Bonvoy, and Sonder properties are not available for new bookings on Marriott's channels.
Marriott said its immediate priority was supporting guests currently staying at Sonder properties and those with upcoming reservations. Marriott will be contacting guests who booked directly through Marriott channels, including marriott.com, the Marriott Bonvoy App and Marriott's worldwide reservation centres, to address their reservation and booking needs. Guests who booked through a third-party online travel agency should contact those organisations. Marriott added that it remained committed to minimising disruption to guests' travel plans.
The two companies initially signed a partnership agreement last year, which was said to look like a win-win deal for both parties. The logistics outlined in the deal also sounded promising, with Marriott agreeing to add around 9,000 new rooms to its existing inventory.
The specifics as to why the agreement fell through, with Marriott outlining in a statement that it was due to Sonder’s removal from the partnership.
In a statement, Sonder said it has faced severe financial constraints arising from, among other things, prolonged challenges in the integration of the Company’s systems and booking arrangements with Marriott International.
“The Company made comprehensive efforts to evaluate all financing and other strategic alternatives, including a sale of its business and operations, to improve its financial condition,” a spokesperson from Sonder said in a statement.
As part of those efforts, the Company engaged numerous strategic and financial parties but ultimately was unable to execute a viable going concern transaction for its business and operations or obtain additional liquidity. In light of these unsuccessful efforts and the Company’s financial condition, the Board of Directors made the difficult decision to wind down operations and pursue a court-supervised liquidation of the U.S. business immediately.
“We are devastated to reach a point where a liquidation is the only viable path forward,” said Janice Sears, Interim Chief Executive Officer of Sonder.
“Unfortunately, our integration with Marriott International was substantially delayed due to unexpected challenges in aligning our technology frameworks, resulting in significant, unanticipated integration costs, as well as a sharp decline in revenue arising from Sonder’s participation in Marriott’s Bonvoy reservation system. These issues persisted and contributed to a substantial and material loss in working capital. We explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.”
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