Sonder Hotel Shutdown: Travel Expert Breakdown
A News Segment with Mark Murphy, Founder of TravelTube.com
The Crisis
What Happened
The Situation
- Hotel guests around the world forced out of their accommodations with barely any notice
- Followed abrupt shutdown of Sonder (short-term rental company)
- Sonder was connected to hotel giant Marriott
- Some people had less than 24 hours to vacate
Guest Testimony
Direct Quote from Affected Guest: "Marriott and Sonder licensing agreement is no longer in effect. So they basically told us, okay, today the licensing agreement doesn't work anymore. It's not in effect, and you have to check out. So we don't care about anything. You have to check out, and we cannot assure you your reservation."
Expert Analysis: What Went Wrong
Mark Murphy's Explanation
Company Background
- Sonder is a short-term rental company with their own buildings
- They stretched themselves too thin
- Did an IPO in 2022
The Real Problem: "It looks like they just moved really fast, tried to get this IPO out so the founders can make a lot of money, but they didn't really have the financial savvy or the wherewithal to weather any kind of hiccups"
The Marriott Deal Breakdown:
- Signed deal to have Marriott be the reservation system
- Couldn't meet requirements necessary to integrate
- Spent a lot more money than they actually had
- Result: Chapter 7 bankruptcy - full liquidation
Guest Reactions and Concerns
The Trust Factor
Anchor's Concern: "This is an easy thing to fall into. I feel you see Marriott and you trust it."
Mark's Response: "If you booked it with Marriott, you know that absolutely you have trust in that brand"
How the Marriott System Works
The Structure:
- Marriott is basically a reservation system
- Developers build properties
- They "flag" it with the Marriott brand (or Hilton, etc.)
- That system and brand drives bookings
Who's Affected and How
Guests Who Haven't Arrived Yet
The Good News: ✅ "Fine in 90% of cases"
Why:
- Haven't done anything except use credit card to hold reservation (unless prepaid discounted booking)
- Can cancel 3-4 days beforehand with no penalty
- In some cases, 24 hours beforehand with no penalty
Guests Already There
The Bad News: ❌ "They got screwed"
Reality:
- Have to scramble to find different accommodations
- Obviously depends on where they're at
- Depends on how they booked
Protection Strategies
Booking Tips
1. Avoid Prepaid Bookings
- Your money gets tied up
- If you have to cancel without travel insurance, you're out of luck
- Less flexibility if something goes wrong
2. Always Use a Credit Card
- Can go back to credit card company
- Try to get refund and chargeback if possible
- Multiple ways to maneuver around issues
3. Get Travel Insurance
- Can step in to cover unexpected cancellations
- Depends on the policy
- Provides protection layer beyond credit cards
Sonder's Official Statement
Company Response: "The partnership with the hotel chain was delayed because of unexpected challenges and was left no choice other than to proceed with an immediate wind down of operations"
Translation: Financial problems forced immediate shutdown
The #1 Protection: Use a Travel Agent
Why Travel Agents Matter
Mark's Primary Recommendation: "My first tip is don't book it yourself, book with a travel agent or travel advisor"
What Travel Agents Provide
Vetting and Expertise:
- They vet properties
- They vet suppliers
- In many cases, have traveled and explored these places personally
- Have gut feelings from experience
- Experience going back decades in some cases
Crisis Management:
- They've got your back
- They work for you to recover your refund
- They protect that one-night cancellation charge
- They re-book you somewhere else
- Result: While you're driving and scrambling, they've already rebooked you
Cost: 💡 "They don't cost you any more money"
- 99% of the time costs nothing to use traditional travel agent
- No extra charge to consumer
Current Travel Market Reality
Good News for Displaced Guests
Timing:
- Currently in "shoulder season" (soft travel season)
- Probably a lot of availability in various destinations
- Kids are back at school
- Before the holidays
What This Means:
- Folks who got stuck will likely find accommodations
- Will have to fight for refund from credit card companies
- Can get rebooked, though it's a headache if doing it yourself
Travel Agent Industry Update
Post-COVID Boom
Anchor Question: "How many people still use travel agents?"
Mark's Answer: "A ton. In fact, it went up after COVID because of all the restrictions and the requirements"
Industry Stats
Current Business Volume:
- Travel agents book about $200 billion in travel today
- Industry saw increase after pandemic due to complexity
What They Do:
- Go out and explore various destinations
- Get real insights and experiences
- Share feedback on properties and experiences
- Test new offerings (example: Disney Destiny cruise)
Real Guest Experience: Claudia and DeVide
Their Story
What Happened: "We had to search on every website to find another accommodation. Obviously, we spend other money to find another accommodation. And we hope for our refund from Marriott Bonvoy, because we're not sure we're going to have a refund. Right now, we don't have any information from them."
Their Refund Chances
Mark's Assessment: "It depends on how they booked it"
Key Factors:
- Did they book through Marriott?
- Did they book with points?
- Did they book with a credit card?
Different Scenarios:
If Booked Directly with Sonder:
- ❌ Going to have a problem
- ✅ Unless credit card company can achieve chargeback
If They Have Travel Insurance:
- ✅ Insurance would step in most cases
- Depends on specific policy
- Could cover the loss
The Online Booking Oligopoly
Industry Concentration
The Reality: "60% of all online bookings are booked through two companies which control almost every brand you see out there when you do it yourself"
The Two Giants: Both own multiple brands including:
- Expedia
- Orbitz
- Hotwire
- Priceline
- Many others
What This Means: "You're dealing with only two businesses in that case"
Key Takeaways
Protection Checklist
1. Use a Travel Agent/Advisor
- ✅ Costs nothing (99% of the time)
- ✅ Professional vetting of properties
- ✅ Decades of experience
- ✅ Crisis management included
- ✅ Will handle rebooking automatically
2. Get Travel Insurance
- ✅ Covers unexpected cancellations
- ✅ Protection beyond credit card
- ✅ Can step in when things go wrong
3. Smart Booking Practices
- ✅ Use credit cards (not prepaid bookings)
- ✅ Understand cancellation policies
- ✅ Book flexible rates when possible
- ✅ Know you can do chargebacks
4. Understand the System
- Hotel brands often just provide reservation systems
- Properties may be owned/operated by third parties
- Big online booking sites are owned by just 2 companies
- Not all "Marriott" properties are actually owned by Marriott
Warning Signs to Watch For
Red Flags (Based on Sonder Case)
Company Concerns:
- Recent IPOs (2-3 years old)
- Rapid expansion
- Stretched finances
- Integration problems with major partners
Booking Concerns:
- Third-party operators using major brand names
- Prepaid non-refundable deals (less flexibility)
- Properties that seem disconnected from main brand
- Deals that seem too good to be true
If It Happens to You
Immediate Steps
1. Contact Your Credit Card Company
- Request chargeback
- Explain situation
- Provide documentation
2. Contact Travel Insurance (If You Have It)
- File claim immediately
- Provide all documentation
- Follow their process
3. If You Used a Travel Agent
- Contact them immediately
- Let them handle the situation
- They'll work on refund and rebooking
4. If You Booked Yourself
- Start looking for alternative accommodations
- Document all additional expenses
- Keep all receipts
- May need for chargeback or insurance claim
Follow-Up Steps
Document Everything:
- Original booking confirmation
- Cancellation notice
- Communications with property/company
- Additional expenses incurred
- New booking costs
Pursue Refunds Through:
- Credit card chargeback
- Travel insurance claim
- Original booking platform
- Consumer protection agencies (if needed)
Anchor's Final Reflection
Key Lessons Learned: "I've learned a lot from you. One, call a travel agent and get travel insurance. That's two things I typically don't do. And I don't think many viewers do either."
The Reality: Most people don't use these protective measures, which leaves them vulnerable when situations like the Sonder shutdown occur.
Bottom Line
The Core Message
DIY Booking Risks: When you book yourself, you're on your own when things go wrong. The money saved (if any) may not be worth the risk and stress of crisis management.
Professional Support Value: Travel agents provide free expertise, protection, and crisis management that becomes invaluable when companies suddenly shut down or cancellations occur.
Insurance Necessity: Travel insurance is no longer optional in an era of unpredictable shutdowns, cancellations, and travel disruptions.
The Sonder Lesson
This shutdown demonstrates that even properties associated with trusted brands like Marriott can fail suddenly, leaving guests stranded. The best protection is professional guidance (travel agents) combined with financial protection (travel insurance and credit card protections).
Stay informed, stay protected, and consider using professional travel advisors for your next trip.
