- Sonder Holdings and Marriott entered a 20-year licensing deal, integrating Sonder’s properties into Marriott’s platform under the “Sonder by Marriott Bonvoy” banner.
- The deal provides Sonder with commitments for $43M in preferred equity and $83M in additional liquidity, ensuring operational stability and growth potential.
- The agreement highlights Marriott’s ongoing focus on expanding its offerings in the short-term rental space while helping Sonder tap into Marriott’s global network and loyalty program.
Sonder Holdings Inc., (SOND) a key player in the alternative lodging market, has reached a pivotal licensing agreement with Marriott International Inc. (MAR), allowing its properties to be listed under the “Sonder by Marriott Bonvoy” brand.
Deal Details
As reported in Bloomberg, the partnership comes with a capital raise that includes $43M in preferred equity commitments and $83M in additional liquidity from existing lenders, solidifying Sonder’s financial standing amid a challenging business landscape.
The new capital will provide Sonder with crucial short-term liquidity, easing financial pressures and setting the stage for future growth. After a period of uncertainty, including a sharp drop in market capitalization, Sonder’s CEO Francis Davidson is optimistic that the Marriott partnership will help the company return to profitability.
Licensing Agreement
The 20-year deal allows Sonder to list its more than 9K boutique hotel rooms and apartment-style properties on Marriott’s platforms, increasing visibility and accessibility for potential guests. Marriott’s global sales force and established brand offer Sonder a lifeline as the pressure ramps up on unprofitable companies.
Meanwhile, Marriott will benefit from the addition of a large number of urban accommodations to its portfolio, further expanding its presence in the short-term rental space without significant new development.
Members of Marriott’s loyalty program will also be able to earn and redeem points at Sonder properties, making the brand more appealing to business travelers and frequent Marriott guests.
What’s Next
As the integration progresses, Marriott will continue to focus on diversifying its accommodation options, while Sonder aims to stabilize and eventually expand its business model with the help of Marriott’s vast network.
This collaboration reflects the ongoing evolution of the hospitality industry, where established brands are increasingly aligning with alternative lodging providers to capture new market segments.
The Sonder by Marriott Bonvoy integration is expected to be completed by 2025, aligning with Marriott’s broader strategy of diversifying offerings to cater to evolving traveler preferences.
