When Sonder finally filed for liquidation, I found myself going down a rabbit hole and not because I wanted to watch a company fail, but because I couldn’t ignore the similarities between what they were trying to build and the industry I operate in every day.

I kept asking myself: how does a company valued at over two billion dollars, backed by world-class investors, partnered with Marriott, collapse so completely?

And the more I dug, the more obvious it became that Sonder didn’t die from a single mistake; they died from a structural misalignment that began all the way back in 2014 when the company was founded.

Sonder started in Montreal, born out of a student apartment idea that quickly grew into something much bigger. They moved to San Francisco and tapped into the energy of the “blitzscale” era, when investors threw millions at any startup that sounded like technology. If you positioned yourself as “tech-enabled hospitality,” Silicon Valley wanted in. The problem is that blitzscaling rewards speed, not sustainability. And hospitality; real hospitality, punishes you brutally for forgetting that.

Also Read: 'Marriott announces termination of agreement with Sonder'

From the beginning, Sonder built on the wrong foundation: long-term master leases. Ten years, sometimes twenty. City after city. Country after country. They were taking on obligations that even hotels avoid today. Every lease meant fixed rent, with or without guests. It meant absorbing all market shocks personally. It meant scaling liability, not revenue. In my view, this is where Sonder sealed its fate. Hospitality is seasonal, cyclical, and deeply sensitive to macro shifts.

A company that decides to carry the burden of hundreds of buildings on long leases is essentially betting the entire business on everything going right, all the time. Nothing in hospitality works that way.

And then there was the furniture. Most people don’t realize how heavy this burden is unless they’ve operated in this space. Sonder furnished almost every single unit they operated not lightly, but completely. Beds, couches, linens, decor, appliances, artwork, the works. Multiply that by thousands of units across the U.S., Europe, the Middle East, Mexico. The cost structure becomes enormous.

And worse, furnishing is sunk cost. If a building underperforms, you can’t “unfurnish” and recover the money. If a city changes regulations, everything you invested in those units instantly becomes dead capital. When I learned how aggressively Sonder expanded while carrying this capex on their own balance sheet, I realized their model was built to collapse under its own weight.

Instead of simplifying, Sonder made things more complicated by insisting on building their own tech stack—an internal PMS meant to power operations. In theory, it sounded impressive. In reality, it created another point of failure. Their system wasn’t designed to integrate with global hotel infrastructure, particularly Marriott’s. I can say this confidently: in hospitality, you either build software as your core business, or you use proven software that already solves the problem.

Sonder was doing neither. They were building a system they didn’t have the maturity to maintain, while ignoring PMS platforms like Guesty or Cloudbeds that were already engineered for exactly the integrations they needed.

Then came the SPAC in 2022. Sonder went public through Gores Metropoulos II, and the headlines said they were raising more than $650 million. But once you peel away redemptions and deal costs, Sonder walked away with closer to $292 million in usable cash. That number matters because once they were public, they couldn’t hide the reality anymore. The lease liabilities were visible. The cash burn was visible. The impairments were visible. The market could finally see what the business actually was: a heavily indebted, asset-heavy operator trying to brand itself as a tech company.

If the SPAC exposed the flaws, the Marriott partnership magnified them.

Sonder’s deal with Marriott should have been transformative. It should have turned their units into distributed inventory under the world’s largest hotel umbrella. But Marriott’s standards are not negotiable. They don’t look at your units the way Airbnb does. They evaluate them like hotels.

And when the audits began, it became obvious that Sonder’s inventory wasn’t ready. The furniture wasn’t hotel-grade. The materials weren’t commercial. Layouts weren’t compliant. Fire safety didn’t align. Even mattresses and linens had to be replaced to meet Marriott criteria.

This forced Sonder into a second wave of capex; replacing furniture they had already paid for once. Cities like New York, London, Miami, Rome, Dublin were undergoing upgrades at the exact same moment Sonder’s cash was tightening. Even worse, the furniture they removed wasn’t worth anything. Much of it was thrown out, sold cheaply, donated, or stored at additional cost. From a financial standpoint, this was catastrophic.

And the final nail? Their PMS simply couldn’t integrate with Marriott’s CRS and loyalty systems. Bookings wouldn’t sync. Rates wouldn’t map. Milestones were missed. Marriott eventually terminated the partnership due to Sonder’s default. When I reached this part of the story, I realized that Sonder didn’t just lose a partner — they lost the one lifeline that could have redefined their future.

Looking back, there were three moments where Sonder could have pivoted. During COVID, when their leases carried them into deep losses. During the SPAC, when their financials were laid bare. And during the Marriott integration, when their tech and operations clearly couldn’t handle the scale. But instead of shifting models, they doubled down. They kept scaling the same broken structure.

This is the part where I can’t help but compare it to how we built MajeStay. Our model is asset-light: no long-term leases, no massive furnishing capex, no global liabilities. Property owners furnish their own units. We manage them with a minimum guarantee and revenue share. Operationally, this keeps the business flexible. Technologically, we integrate with proven PMS systems designed for global distribution, not rebuild everything from scratch. If I’m being completely honest, if Sonder had adopted a model even remotely similar to ours, asset-light, flexible, scalable, tech-enabled but not tech-dependent; they would still be around today. They would have sailed through downturns, integrated smoothly with Marriott, avoided lease defaults, and preserved their balance sheet.

Sonder didn’t fail because the world didn’t want what they offered. Guests loved the concept. Cities needed it. The market proved it. Sonder failed because they bet the entire business on a model that could not withstand the realities of hospitality.

And that, for me, is the greatest lesson of all: In hospitality, your business model matters more than your marketing. Your structure matters more than your story. And resilience beats speed, every single time.

Also Read: 'Sonder Holdings expects to initiate a Chapter 7 liquidation of its US business'

Ahmad Al Jamal - Follow
My passion evolves around technology, hospitality, blockchain and gaming