Tech has a lot of benefits in hotels, but hotels are not a tech company.
Sonder forgot this.
Sonder promised to be a new kind of hospitality company. Tech-forward, asset-light in branding, yet operating more like a hotel than a platform. By 2022, it had gone public at a $2.2 billion valuation. By 2025, it had liquidated, leaving guests locked out, landlords unpaid, and a cautionary tale behind.
The demand was there and the occupancy was strong. The product fit was clear, guests wanted apartment-style stays with hotel-level consistency. The issue was structural: Sonder scaled like a tech company but carried the costs of a real estate-heavy operator. Every new unit meant new leases, furnishing, servicing, local staffing, and city-specific compliance. Tech could not erase those fundamentals.
Here’s the core lesson for the hotel industry: Sonder didn’t collapse because of a revenue problem. It collapsed because its teams couldn’t see the full cost picture.
High occupancy masked thin margins. Cost behavior across occupancy bands wasn’t visible in decision-making. Strategic deals, like the Marriott integration, promised growth but brought higher commissions and tighter margin pressure. Sonder’s leadership kept optimizing for growth without solving for cost structure.
This is how revenue strategies turn into systemic risk.
They chase top-line growth that doesn’t convert to profit. They price for volume without accounting for segment-level variable costs. They pursue partnerships that dilute margins under the guise of scale.
Cost blindness makes entire models look viable, until they aren’t. Sonder is not an outlier. Every hotel scaling operations or pursuing new demand segments without visibility into cost behavior is running the same risk, just slower.
Do you truly know your hotel’s costs every month? If not, happy to show how teams use Profix to get that visibility and plan with margins in mind.