Dive Brief:
- Accommodations provider Sonder Holdings announced $50 million in annualized cost reductions and the sale of $18 million in Series A shares as the company finalizes its integration into Marriott International’s network, according to a Monday release.
- The San Francisco-based firm will reduce costs via layoffs, savings on software and “other efficiencies” in conjunction with the integration. The company declined to share further details, including the number of layoffs planned, with Hotel Dive.
- Sonder, which entered into a partnership with Marriott last August, expects all of its properties will be live on Marriott channels by the end of the second quarter. Sonder said last year that it expects the partnership to add $146 million in additional liquidity to the firm, following legal and operational challenges that dampened shareholder value last year.
Dive Insight:
According to Sonder co-founder and CEO Francis Davidson, the company is “right-sizing our organization for the next era of Sonder” as the Marriott integration nears completion. “The integration with Marriott is expected to enhance the positive RevPAR and profitability trends that our portfolio has already experienced over the last several months,” Davidson said in a statement.
By the end of the second quarter, all Sonder properties will be available on Marriott digital channels, including Marriott.com and the Marriott Bonvoy app, under the “Sonder by Marriott Bonvoy” collection, according to the announcement. The first phase of the integration was completed in October 2024, when properties were added to the Marriott Bonvoy system.
Sonder expects the partnership to increase revenue and power future growth, according to an August release. Through the tie-in, Marriott adds thousands of Sonder rooms — primarily apartment-style accommodations in urban markets — to its pipeline and portfolio. Sonder, meanwhile, benefits from Marriott’s distribution, loyalty program and sales capabilities.
Previously, the company’s stock price fell last March after the firm identified “accounting errors” in its fourth-quarter and full-year 2023 financial results.
The upcoming round of layoffs follows Sonder terminating 17% of its corporate workforce to cut costs in February 2024, according to a filing with the U.S. Securities and Exchange Commission.
In August, experts told Hotel Dive that the partnership would create value for both companies, with Marriott boosting its net rooms growth and diversifying its real estate holdings.
