What Happened with Sonder

In November 2025, Marriott International terminated its licensing agreement with Sonder, a short-term rental operator that had rapidly expanded its portfolio through the partnership. The termination triggered a cascade of events that led to Sonder winding down operations and moving toward bankruptcy proceedings.

This sudden collapse removed thousands of Sonder listings from Marriott's booking systems and left many travelers without accommodations for upcoming trips—despite having already paid for confirmed reservations.

Step-by-Step Refund Process

Follow these detailed steps to maximize your chances of getting a full refund:

Step 1: Identify Who Charged Your Card

This is the most critical first step. Review your credit card statement and booking confirmation email to determine whether the merchant of record is listed as Sonder or Marriott. This distinction determines which refund path you'll follow.

Step 2: Gather Written Documentation

Before contacting anyone, collect and save all relevant documentation:

• Original booking confirmation emails
• Cancellation notifications or property closure notices
• Screenshots of cancelled reservations in booking portals
• Email correspondence with Sonder, Marriott, or booking platforms
• Credit card statements showing the charge
• Any communication acknowledging the booking cancellation

Step 3: Contact the Appropriate Booking Channel

Based on who charged your card, take the following action:

Step 4: File a Credit Card Dispute (Chargeback)

If the merchant charged directly is Sonder, or if other refund attempts fail, filing a chargeback with your credit card issuer is often the most effective solution:

1. Contact your card issuer's dispute department: Call the number on the back of your card and ask to file a dispute for "services not rendered" or "merchant insolvency"
2. Provide your documentation: Submit all the evidence you gathered in Step 2
3. Explain the situation clearly: State that the merchant (Sonder) went out of business and cannot fulfill the reservation you paid for
4. Follow up regularly: Credit card disputes can take 30-90 days to resolve. Check status weekly
5. Be persistent: If your first dispute is denied, you can often appeal with additional documentation

Step 5: Save Receipts for Emergency Rebooking

If you had to book alternative accommodation at the last minute due to your Sonder cancellation, keep all receipts and documentation. These may be useful for:

• Travel insurance claims (if you have coverage for supplier insolvency)
• Supporting your credit card dispute with proof of damages
• Potential future class action lawsuits or bankruptcy proceedings

Why Chargebacks Become Necessary

When a company files for bankruptcy or becomes insolvent, traditional refund processes often fail. Here's why chargebacks are crucial in these situations:

Merchant insolvency means the company lacks the financial resources to process refunds through normal channels. Even if Sonder wanted to issue refunds, they may not have the operational capacity or available funds to do so.

Credit card protections exist specifically for these scenarios. When you pay with a credit card, you're protected by federal regulations that allow you to dispute charges for services not received. The card issuer essentially reverses the charge and recovers funds from the merchant's account or insurance.

Time is critical because most credit card companies have dispute deadlines (typically 60-120 days from the transaction date or when you discovered the problem). File as soon as you know your booking is cancelled.

Understanding the Sonder Collapse

Understanding what went wrong can help you avoid similar situations in the future. Here's what led to Sonder's failure:

Rapid Expansion and Marriott Partnership

Sonder pursued aggressive growth, acquiring properties and entering into a substantial licensing agreement with Marriott International. This partnership promised to bring Sonder's portfolio into Marriott's distribution system, giving the startup access to millions of Marriott Bonvoy members.

Integration Challenges

The technical integration between Sonder's systems and Marriott's massive booking infrastructure proved more complex and costly than anticipated. Problems with inventory management, pricing synchronization, and booking confirmations created operational headaches.

Liquidity Crisis

As a venture-backed startup, Sonder was already operating with thin margins. The unexpected integration costs, combined with the capital-intensive nature of the short-term rental business, created a liquidity crunch. When Marriott terminated the partnership, it removed Sonder's primary distribution channel and accelerated the company's financial collapse.

Rapid Shutdown

The speed of the collapse—from partnership termination to operational shutdown—created a ripple effect across thousands of pre-paid reservations. Guests found themselves without accommodations, often with little advance notice.

How to Protect Yourself in Future Bookings

While you can't eliminate all risk when booking travel, these strategies significantly reduce your exposure to merchant failures:

Understanding Your Rights as a Consumer

When a travel provider fails to deliver services you paid for, you have several layers of consumer protection:

Credit Card Protections (Regulation Z)

The Fair Credit Billing Act gives you the right to dispute charges for goods or services not delivered as agreed. This applies when a merchant goes bankrupt before fulfilling your reservation.

Travel Insurance Coverage

If you purchased travel insurance with supplier default coverage, you may be entitled to reimbursement even if credit card disputes fail. Check your policy's specific terms.

State Consumer Protection Laws

Many states have consumer protection statutes that provide additional remedies for unfulfilled services. While bankruptcy proceedings complicate matters, these laws may support your claims.

What's Next for Affected Travelers

The Sonder situation continues to evolve. Here's what to monitor:

• Bankruptcy proceedings: If Sonder files for formal bankruptcy, there may be a claims process for creditors—though unsecured creditors (like customers owed refunds) typically recover little
• Class action lawsuits: Consumer attorneys may file class actions against Sonder or Marriott. While these can take years, they may eventually provide some recovery
• Credit card dispute outcomes: Track your dispute carefully and be prepared to provide additional documentation if requested
• Marriott's response: Monitor whether Marriott offers any additional remedies or compensation for affected Bonvoy members