Former Sonder president Francis Davidson, left, makes an announcement with then Quebec innovation minister Pierre Fitzgibbon, Quebec Premier François Legault and Sonder executive Martin Picard in Montreal in 2020.Paul Chiasson/The Canadian Press
Travellers are stranded, booking providers are scrambling and some neighbours are breathing a sigh of relief after Canadian-founded short-term rental company Sonder Holdings Inc. SOND-Q announced its shutdown.
Launched in 2014 and co-founded by McGill University alum Francis Davidson, Sonder promised the comfort of an Airbnb unit with the consistency and polish of a hotel, reaching a valuation of nearly US$2-billion when it went public in 2022.
But after Marriott International Inc.’s Bonvoy loyalty program abruptly announced it had ended its licensing deal with Sonder on Sunday, the company issued a statement the next day saying it would be filing for bankruptcy, citing “severe financial constraints.”
Sonder, a short-term rentals company, abruptly collapsed over the weekend when its partnership with Marriott ended.Billy Tompkins/Reuters
The move has upended travel plans for thousands of people in the buildup to the busy holiday season, though some neighbours and housing advocates see a silver lining as more apartments could spill back into the market.
It was just after 9 a.m. on Monday when Rachael D’Amore was jolted awake by banging at the door of her rental suite in Montreal’s old quarter.
“A Sonder employee who was brisk but friendly was, like, ‘I’m sure you got the e-mail. You guys have to get out of here,’ ” said Ms. D’Amore, describing the final morning of a weekend getaway with her husband for his birthday.
Over the weekend, the Toronto couple had already been shaken by notices from Marriott and Sonder to vacate the premises, at one point prompting them to rush back to their suite while touring Montreal to check on their things.
They initially chalked it up to a rewards points mix-up. “We called Marriott who pushed us to call Sonder,” Ms. D’Amore said. “When we called Sonder an automated message came up and was, like, no one is manning these phone lines.”
Even with the rough wake-up call, Ms. D’Amore and her husband considered themselves lucky as they were at the end of their stay. Bewildered guests they spoke with in the complex had stays booked for many more days, she said. Many found themselves booted out without a plan as third-party booking platforms scrambled to provide answers.
In a news release, Expedia said it was contacting affected travellers with next steps regarding refunds and rebooking assistance. “Our immediate priority is supporting those currently in stay or with near term travel,” the platform said.
Sonder’s business model involved leasing and renovating properties before renting them out for short-term stays managed largely through a tech platform, drawing criticism similar to that faced by Airbnb.
Toronto resident Marie-France Caron said Sonder units had taken up multiple floors of her apartment complex in the city’s west end. “It also means that there [are] strangers every weekend in the complex, which has never been very reassuring to me,” she said.
More concerning, Ms. Caron said, was that her rent has skyrocketed from around $1,700 to $2,365 in the years since Sonder started operating in the building. (It’s unclear whether the company’s arrival had any direct impact on the rent prices.)
A 2024 report from Statistics Canada titled, “Short-term Rentals in the Canadian Housing Market,” showed that by 2023, 107,266 housing units had been converted to commercial short-term rentals, making them unavailable for long-term occupancy.
“Even though it breaks my heart for the employees to lose their jobs, I am also happy that they are going under,” said Ms. Caron in written correspondence. “We Torontonians need these units to put a roof above our head. The market is hard enough as it is right now.”
During its expansion, Sonder had more than 100 units at a handful of locations across Toronto’s swankiest districts. That’s in addition to hundreds of units in Vancouver and Montreal, along with more than 35 cities across 10 countries.
Though founded in Montreal, Sonder moved its headquarters to San Francisco, allowing it to avoid being treated as a foreign company in the U.S. tax system.
In 2020, Quebec’s provincial government extended the company a $30-million loan to help fund a $182-million growth project there and create 700 jobs by 2025.
But Sonder struggled to scale after going public in 2022 in the middle of the COVID-19 pandemic.
Marriott International’s Bonvoy loyalty program abruptly announced it had ended its licensing deal with Sonder on Sunday.Andrew Kelly/Reuters
A partnership with Marriott last year became a lifeline. When Sonder signed an agreement with the multinational company in the summer of 2024, its shares skyrocketed, with more than 9,000 units expected to join the Marriott system by the end of 2024.
But in its Monday statement, Sonder said its financial strain was driven in part by “prolonged challenges in the integration of the company’s systems and booking arrangements with Marriott International.”
Many travellers are now trying to salvage upcoming plans months in the making.
In the United States, Mike Perez was supposed to check in for the first day of his six-night stay at a Sonder rental in New York on Wednesday. He received a message from Marriott saying his upcoming booking was cancelled.
“Calling customer support was useless,” said Mr. Perez, who was visiting family ahead of the holiday season. He was forced to pay US$1,500 for new accommodations in addition to the US$600 he’d already spent.
“Marriott would not credit the difference for booking at another property, would not compensate with points and would not promise they could get a lower rate at a nearby hotel,” he said.
Marriott did not respond to a request for comment.