I donโt enjoy talking about failures, but when a $๐ฎ ๐ฏ๐ถ๐น๐น๐ถ๐ผ๐ป ๐๐๐ฎ๐ฟ๐๐๐ฝ ๐ฐ๐ผ๐น๐น๐ฎ๐ฝ๐๐ฒ๐ ๐ผ๐๐ฒ๐ฟ๐ป๐ถ๐ด๐ต๐, itโs worth asking why.
This week, Sonder Inc., once valued at over $2 billion and hailed as โthe next Airbnb meets Marriottโ, shut down.
After 11 years, the company filed for bankruptcy just one day after ๐ ๐ฎ๐ฟ๐ฟ๐ถ๐ผ๐๐ ๐ฒ๐ป๐ฑ๐ฒ๐ฑ ๐๐ต๐ฒ๐ถ๐ฟ ๐ฝ๐ฎ๐ฟ๐๐ป๐ฒ๐ฟ๐๐ต๐ถ๐ฝ.
At first glance, it looks like a tech integration gone wrong.
But the truth runs deeper, and itโs a masterclass in what not to do when building a hospitality-tech business.
Hereโs what really killed Sonder ๐
1๏ธโฃ The wrong foundation โ Sonderโs โmaster leaseโ model meant paying fixed rent for thousands of apartments. Great when occupancy is 90%, catastrophic when itโs 60%. They built a hotel chain without owning hotels, but with all the risk of one.
2๏ธโฃ The tech illusion โ They called themselves a โtech company,โ but their tech was just a digital layer. The core business was real estate, operations, and cleaning, not code.
3๏ธโฃ The lifeline that drowned them โ The Marriott deal looked like salvation: access to 200 million Bonvoy members. But the integration failed, costs exploded, and revenue dropped once direct bookings had to go through Marriott (and pay commissions).
4๏ธโฃ Timing and leadership โ The founder and CFO left right after the Marriott rollout, a classic red flag. When leadership exits at โthe best moment,โ itโs rarely a coincidence.
So what do we learn from it:
– โTech-enabledโ doesnโt make a business scalable.
– Operational excellence still beats storytelling.
– Partnerships should be tested for dependency risk, not just reach.
– If your business model only works in perfect conditions, itโs not innovation, itโs speculation.
Failures like this are uncomfortable to watch, but for those of us building in travel and hospitality, theyโre invaluable.