In a significant move to expand its portfolio, Marriott International, Inc. (NASDAQ: MAR) has announced a groundbreaking long-term licensing agreement with Sonder Holdings Inc. (NASDAQ: SOND), a leader in apartment-style accommodations. This collaboration marks a pivotal shift in the hospitality landscape, promising to enhance the urban travel experience.
Strategic Expansion
Under this transformative agreement, Sonder’s portfolio, which primarily features apartment-style lodgings in bustling urban centers, will be integrated into Marriott’s offerings as part of the newly minted “Sonder by Marriott Bonvoy” collection. With over 9,000 rooms slated to be added to Marriott’s portfolio by the end of 2024 and an additional 1,500 rooms in the pipeline, Marriott anticipates a net room growth of 6 to 6.5 percent for the full year.
A Focus on Modern Travel Needs
Sonder, established in 2014, operates innovative accommodations tailored to modern travelers across North America, Europe, and the Middle East. Known for its digital-first approach and appeal to younger demographics, Sonder’s facilities are ideal for longer stays, blending the comfort of home with the luxury and reliability of professional service.
Benefits for Marriott Bonvoy Members
Starting later this year, members of the Marriott Bonvoy program will be able to earn and redeem points at approximately 200 Sonder by Marriott Bonvoy properties. This integration not only broadens the scope of Marriott’s loyalty program but also enriches the travel experiences available to its members. Full integration of Sonder properties with Marriott’s digital platforms, including Marriott.com and the Marriott Bonvoy app, is anticipated by 2025.
A Win-Win for Both Companies
The collaboration involves a royalty agreement wherein Marriott will receive a fee based on a percentage of Sonder’s gross room revenues. “We are excited about the addition of Sonder’s portfolio to our system, which will expand our portfolio of longer-stay accommodations in key markets around the world,” said Tim Grisius, Global Officer for M&A, Business Development, and Real Estate at Marriott International. He added, “Marriott has long believed in providing the right product at the right price point for all trip purposes and generations of travelers. With the planned addition of Sonder by Marriott Bonvoy, we will be able to provide guests seeking apartment-style urban accommodations with even more options in the Marriott Bonvoy portfolio.”
Market Response
The announcement has been met with enthusiasm in the market, with Sonder’s stock experiencing a notable surge. Closing at 6.04, up 130.53%, it reflects significant investor confidence in the deal’s potential to generate value.
Looking Ahead
As urban travel continues to evolve, partnerships like that of Marriott and Sonder are set to redefine hospitality standards, offering travelers enhanced flexibility, comfort, and convenience. This collaboration is not just a fusion of two companies, but a blending of tradition and innovation, setting a new benchmark for the industry.
