Apartment-style accommodations provider Sonder Holdings' full inventory will be available to book through Marriott International's distribution channels by the end of the second quarter, the company announced Monday. Meanwhile, Sonder has raised about $18 million through a stock sale and plans "headcount reductions" in a cost-cutting strategy, the company said.
Sonder expects its "cost reduction initiatives," when complete, to generate $50 million in annual savings, the company said in a statement. Those initiatives include "software savings and other efficiencies in conjunction with the Marriott integration" as well as headcount reductions, Sonder said. A spokesperson declined to specify to BTN whether those reductions included layoffs or the number of employees affected.
The company said it sold about $18 million worth of shares of its Series A preferred stock on Friday.
Sonder in August 2024 announced a deal that would incorporate Sonder's inventory in Marriott's portfolio, making those accommodations bookable through Marriott's channels. As part of the deal, Marriott paid Sonder $7.5 million in November and another $7.5 million on April 11, Sonder said. The deal was set for 20 years, but both Marriott and Sonder can terminate the deal after five years by paying an undisclosed termination fee.
Sonder's properties will be bookable through Marriott's website and app as the "Sonder by Marriott Bonvoy" collection, according to Sonder.
Sonder co-founder and CEO Francis Davidson in a statement said the integration with Marriott "is expected to enhance the positive [revenue per available room] and profitability trends that our portfolio has already experienced over the last several months." In the third quarter of 2024, the most recent quarter for which Sonder has reported financial results, its RevPAR increased 22 percent year over year.
"With the integration nearing completion, we are capitalizing on these opportunities and right-sizing our organization for the next era of Sonder," Davidson said. "With the implementation of substantial cost savings and approximately $18 million of additional capital, we believe that Sonder is well positioned to support long-term value creation."
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