Marriott should have / could have known Sonder was going to go bankrupt and they put their customers at risk anyways

Sonder was the company that left a bunch of travelers in the lurch this week. In some cases, housekeeping went into their rooms and packed up their things for them, so by the time they came back from lunch, they were kicked out of their hotels. The company said, sorry, we're not a business anymore. And when those travelers called Marriott to try to get a refund or help with other accommodations, Marriott told them, kick rocks. And if you want a refund, you can take it up with your credit card company. This is Sonder's fault. They went bankrupt. We have nothing to do with it. I'm Becca, I'm a CPA and I'm a host of the Corporate Gossip podcast where we talk all about corporate shenanigans just like this. Sonder was a unicorn and it was valued at $1 billion. It was founded by, shocker, two guys on the Forbes 30 under 30 list. The model was similar to WeWork. They would lease apartments, they would turn them into hotel rooms, and then they would post them on Expedia and Airbnb and eventually with Marriott. The problem is, the experiences that a lot of people had were mixed. Even the Points Guy did a blog and he said, I saw some pictures online, when I showed up at my Sonder hotel, things were very different. Sonder went public in 2021 through a SPAC, notably. This is like a backdoor way to go public. You don't have to deal with the audits and nobody comes in and kicks the tire like you would in a normal IPO. And they did that because all the investors are desperate to sell their shares on the open market, so they are taking Sonder public whether they like it or not. I noted that Sonder was never profitable. That's not completely unusual, especially in the startup space. But the thing about Sonder that I discovered that nobody else is talking about is that mathematically, it was impossible for them to ever make a profit. And I figured that out using seventh grade math. Sonder was operating its units at 80% occupancy. And they were losing somewhere between $100 million and $200 million a year. They told investors they were on a path to profitability, but that was mathematically impossible. Even at 100% occupancy, they would have still lost money. In their financial statements after they went public, all they talked about is how fast their revenue was growing. Look, we're growing faster than IHG and Marriott from a revenue growth perspective. No shit, because you're starting from a smaller number. Obviously, some people knew that this business was bullshit because the second the lockup period ended, everybody bailed from the stock and it tanked. Marriott could have and should have known this when they signed an agreement with Sonder earlier this year and allowed Marriott customers to book Sonder properties, a company that was careening towards bankruptcy. But the important thing to Marriott is growing and cutting into Airbnb's market share, which is what they prioritize over their safety of their customers, both before they went into a partnership with Sonder and after it went bankrupt. There's a lot of blame to go around here, the VCs, Marriott, Sonder. You could also blame the Trump administration who's gutting the CFPB, who puts in protections for situations like this one and requires companies to provide refunds which they're not doing. Either way, the people holding the bag at the end of the day are the customers.