Marriott is set to receive a big boost in its portfolio.
Marriott International, the brand that serves as the umbrella for all Marriott operations and hospitality firms, including their hotel and residential services, has announced the inclusion of Sonder Holdings Inc., to their portfolio. This move is set to bring 9,000 additional units to Marriott’s brand collections, and 1,500 additional units set to be planned in the near future. With the hospitality industry dynamically changing since the COVID-19 pandemic, it signals a strategic shift as they navigate the future of the industry.
Sonder Inc. is a brand that owns boutique hotels and apartment/condo-style accommodations in urban markets. This acquisition means that they will now be branded as “Sonder by Marriott Bonvoy.”
Sonder has not been having a great go as of late. They have had to lay off nearly 22% of their workers and face threats of a Nasdaq delisting. However, their CEO, Francis Davidson, recently expressed enthusiasm in a recent interview. He stated the added benefits of having a brand with global reach and an established loyalty program will go a long way to help the company.
In all, it is said that this package total is around $146 million, which will be used to build a foundation for integration and a steady prospect of growth and profit. These will include a hefty $43 million for an investor consortium and an additional $83 million for existing Sonder note holders.
It is stated that by 2025, most of the Sonder properties are to be completely absorbed by the Marriott brand, which will now allow customers to redeem their points in these new locations. This will be occurring at a time when hotels and branded hospitality companies are experiencing renewed interest following the struggles of competitors like Airbnb and other third-party, private locations.
