Marriott International has inked a long-term licensing agreement with apartment-style accommodations company Sonder Holdings.
The deal is set to add over 9,000 rooms to Marriott's inventory by the end of this year, with an additional 1,500 rooms in the pipeline. Sonder's portfolio will also join a new collection, called Sonder by Marriott Bonvoy, which will focus on apartment-style and boutique hotel accommodations in urban centers.
Under the agreement, Marriott will receive a royalty fee based on a percentage of Sonder gross room revenues.
Founded in 2014, Sonder operates apartment-style accommodations and small boutique hotels across more than 45 urban markets in North America, Europe and the Middle East, including London, New York, Los Angeles, Philadelphia, Dubai and Rome. The company favors a digital-forward operating model, offering what it calls "hotel amenities without hotel formality" and allowing guests to check in, make requests or ask for recommendations via their phone.
According to Marriott, Sonder properties are well positioned to cater to several key demographics, including younger travelers and those seeking longer stays.
Marriott Bonvoy members are expected to be able to earn and redeem points on stays at approximately 200 Sonder by Marriott Bonvoy properties by later this year, with full integration of Sonder properties within Marriott's digital channels expected to be complete in 2025.
Photo Credit: Sonder
Sonder's difficulties
Sonder has had its struggles. The company laid off 17% of its corporate staff in February, and Sonder said in April that it received a delinquency notice from Nasdaq. Sonder delayed filing its fourth-quarter and full-year 2023 results because the company "identified accounting errors related to the valuation and impairment of operating lease right-of-use assets and related items for the fiscal years 2022 and 2023."
At the time, Sonder said it had 60 calendar days from the time it received the notice -- April 2 -- to regain compliance with Nasdaq listing rules, but that Nasdaq could extend the deadline to Sept. 30.
Sonder also has reduced its portfolio this year, saying in June that it signed exit agreements with 80 buildings.