Apartment-style accommodation provider Sonder Holdings' full inventory of properties will be available to book through Marriott International's distribution channels by the end of the second quarter, the company revealed on Monday (14 April).
San Francisco-based Sonder announced a deal with Marriott in August 2024 to incorporate Sonder's global inventory within Marriott's portfolio and booking platforms. It will add around 9,000 rooms to Marriott’s global portfolio, with another 1,500 rooms in Sonder’s development “pipeline”.
As part of the deal, Marriott paid Sonder $7.5 million in November and another $7.5 million on April 11, said Sonder in a statement.
The deal runs for 20 years, but both Marriott and Sonder can terminate the contract after five years by paying an undisclosed termination fee.
Sonder's properties will be bookable through Marriott's website and app as the "Sonder by Marriott Bonvoy" collection.
Meanwhile, Sonder has raised about $18 million through a sale of shares and plans "headcount reductions" as part of a cost-cutting strategy.
Sonder expects its "cost reduction initiatives”, to generate $50 million in annual savings when completed.
Those initiatives include "software savings and other efficiencies in conjunction with the Marriott integration" as well as headcount reductions, added Sonder.
Sonder co-founder and CEO Francis Davidson said that the integration with Marriott would "enhance the positive revpar (revenue per available room) and profitability trends that our portfolio has already experienced over the last several months”.
In the third quarter of 2024, the most recent quarter for which Sonder has reported financial results, its revpar increased 22 per cent year-on-year.
Sonder’s portfolio includes properties in key European cities such as London, Paris, Barcelona, Madrid, Milan and Rome.