Benjamin C Tankersley/For The Washington Post
Short-term rental firm Sonder Holdings said it will wind down its US operations after hotel chain Marriott abruptly ended their partnership.
In a Monday press release, the San Francisco company said it plans to file "a Chapter 7 liquidation of its US business," and "initiate insolvency proceedings" in other countries where it operates.
"We are devastated to reach a point where a liquidation is the only viable path forward," said Janice Sears, Sonder's interim CEO.
Sears cited "unexpected challenges" and delays in the company's partnership with Marriott, which was supposed to allow the hotel chain's loyal guests, known as Marriott Bonvoy members, to book Sonders rentals directly on the Bonvoy app or Marriott.com.
Sears said these challenges "contributed to a substantial and material loss in working capital." She said the company explored strategic alternatives but ultimately decided they were "left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets."
The news came one day after Marriott International ended its booking collaboration with Sonder, sending travelers who had made reservations with Sonder scrambling for new accommodations.
David Klingbeil, who teaches at New York University, told Business Insider that he was halfway through his two-week stay at Sonder Flatiron in New York when he received an email on Sunday telling him to vacate the hotel by 8 a.m. on Monday.
"I didn't believe it when I saw the email. I had to check that this wasn't a phishing attempt or something. Then I saw the articles and posts on X," Klingbeil said.
Shares of Sonder, which went public in 2022 with a $1.925 billion valuation, closed down 60% to $0.20 per share.
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