Sonder, the WeWork of apartments, may be bankrupt, but the short-term rental business is healthy

"On November 14, hotel and short-term apartment rental chain Sonder Holdings filed for bankruptcy, just days after suddenly announcing it would be "winding down operations immediately," abruptly kicking guests to the curb and sending employees scrambling for answers. The company had faced major, unforeseen costs from a deal signed in August 2024 to integrate reservation systems with Marriott International and promote Sonder listings through the hotel giant, according to a statement issued four days earlier."

"Sonder had long been an outlier in the short-term rental space, which was a big part of its appeal to investors. Most of its competitors-short-term rental companies like Kasa and AvantStay, the big hotel chains, and individual hotels and bed-and-breakfasts-either own and operate their own properties or manage them on behalf of owners for a cut of revenue and profits."

Sonder Holdings filed for bankruptcy on November 14 after abruptly announcing an immediate wind-down that displaced guests and unsettled employees. The company incurred major unforeseen costs from an August 2024 integration deal with Marriott International to link reservation systems and promote Sonder listings. Sonder operated by taking long-term leases on apartment units and renting them for short-term stays, creating heavy fixed costs, especially rent. Those lease obligations persisted even during periods of low demand or increased expenses from post-pandemic inflation and integration costs, contributing to the company’s financial collapse.

Read at Fast Company