Why Marriott International’s Sonder exit is not shaking investor confidence amid 2025 momentum

Marriott International Inc., listed on the NASDAQ under the ticker MAR, has terminated its licensing agreement with Sonder Holdings Inc. following a reported default by the short-term rental operator. The termination was officially disclosed on November 9, 2025, and results in the removal of Sonder properties from all Marriott platforms, including its website, Bonvoy app, and global reservation centers. Sonder Holdings Inc. is listed on NASDAQ under the ticker SOND. While the incident adjusts Marriott International’s projected net room growth for the year, the American hotel giant has reaffirmed the rest of its 2025 financial guidance. The exit appears to have minimal impact on investor confidence, with markets responding more to the company’s robust third quarter earnings and forward-looking performance indicators.

Why was the Marriott–Sonder agreement terminated and how are existing guest bookings being handled?

Marriott International updated its 2025 room growth forecast following the removal of Sonder units from its system. Net room growth for the year is now expected to approach 4.5 percent, slightly below the previous projection of 5 percent. Despite this change, there were no adjustments made to Marriott International’s other outlook metrics announced earlier on November 4, 2025.

According to the company’s official statement, guests with active Sonder bookings made through Marriott channels will be contacted directly. Travelers who used third-party platforms have been advised to reach out to those booking agents. Marriott International emphasized that minimizing disruption for current and future guests remains a key operational priority. Sonder Holdings Inc., which had positioned itself as a tech-forward alternative hospitality provider, had previously partnered with Marriott International to expand its footprint through the Bonvoy loyalty network. However, operational and financial challenges have continued to plague Sonder Holdings Inc., prompting speculation that integration with Marriott’s core systems may have proved unsustainable.

Industry analysts have suggested that while Sonder’s affiliation was intended to boost Marriott International’s appeal to younger, more digitally-native travelers, the cost of onboarding a financially unstable partner may have outweighed potential loyalty gains. The Marriott Bonvoy ecosystem, already robust and widely adopted, appears strong enough to absorb the Sonder fallout without material damage to brand perception or market performance.

How are Marriott’s earnings performing across luxury, international, and credit card revenue channels?

The Sonder exit occurred just days after Marriott International announced its third quarter results for fiscal year 2025. The company posted net income of USD 728 million, up from USD 584 million during the same period in 2024, representing a year-over-year increase of 25 percent. Adjusted EBITDA reached USD 1.35 billion in the third quarter, a 10 percent rise from the USD 1.23 billion recorded in Q3 2024. These results reflect Marriott International’s continued operational discipline and earnings resilience in a mixed macroeconomic climate.

Third quarter revenue performance was led by international growth and strong luxury segment demand. Global revenue per available room, or RevPAR, rose by 0.5 percent, with international markets contributing a 2.6 percent increase. In contrast, RevPAR in the United States and Canada declined by 0.4 percent, largely due to reduced government travel affecting lower-tier chain segments. Luxury RevPAR globally grew by 4 percent, with executives highlighting solid rate performance and continued demand across high-end destinations.

Base management and franchise fees grew nearly 6 percent to USD 1.19 billion, primarily due to room additions and rising co-branded credit card revenues. Incentive management fees fell to USD 148 million from USD 159 million in Q3 2024, a change driven by declines in the United States and Canada. However, three-quarters of the incentive fees in the latest quarter came from Marriott International’s international portfolio. Owned, leased, and other revenue, net of direct expenses, totaled USD 94 million in the quarter, compared to USD 81 million a year ago. The increase was attributed mainly to the addition of the Sheraton Grand Chicago, which Marriott International acquired in late 2024.

What role is Marriott Bonvoy playing in loyalty expansion and long-term direct booking strategy?

One of the highlights of the quarter was the performance of Marriott Bonvoy, the hospitality group’s global loyalty program. Marriott International reported the addition of 12 million new members in Q3, pushing the total membership base to approximately 260 million worldwide. Member penetration stood at 75 percent in the United States and Canada and 68 percent globally, underlining Bonvoy’s deep integration across Marriott International’s platform. The Bonvoy expansion continues to play a critical role in the company’s asset-light strategy and is frequently cited by institutional investors as a competitive strength that supports higher direct booking volumes and long-term brand loyalty.

How are Marriott’s share buybacks, debt profile, and pipeline expansion influencing investor sentiment?

On the cost side, general, administrative, and other expenses dropped to USD 234 million from USD 276 million in Q3 2024. This decrease was helped by the absence of a USD 19 million operating guarantee reserve that had impacted the prior-year quarter and by lower compensation expenses. Notably, Marriott International also booked a USD 40 million benefit in restructuring and merger-related line items, driven by insurance recoveries tied to the 2018 Starwood data breach. In contrast, this line had posted a USD 9 million expense in the prior-year quarter. Interest expenses increased to USD 194 million from USD 168 million, largely due to higher debt servicing costs. The company’s total debt at quarter-end stood at USD 16 billion, with USD 0.7 billion in cash.

Marriott International’s reported diluted earnings per share climbed to USD 2.67 in the third quarter from USD 2.07 in the previous year. Adjusted diluted EPS came in at USD 2.47, up from USD 2.26. Adjusted net income stood at USD 674 million, compared to USD 638 million in the prior-year period. These earnings metrics exclude reimbursed costs and other one-time items.

Marriott International added about 17,900 net rooms in Q3 2025, including nearly 13,900 in international markets. The company’s global system now comprises more than 9,700 properties and roughly 1.75 million rooms. At the end of the quarter, Marriott International’s development pipeline included 3,923 projects with over 596,000 rooms. Of these, approximately 250,000 rooms are already under construction. Over half of the pipeline is located outside North America. Importantly, the company’s acquisition of the citizenM brand will be reflected in the fourth quarter results, with the integration expected to further expand Marriott International’s presence in the upscale lifestyle segment.

What guidance has Marriott issued for Q4 2025 and how does it compare with earlier expectations?

For the fourth quarter of fiscal year 2025, Marriott International is guiding toward adjusted diluted earnings per share between USD 2.54 and USD 2.62. Full-year guidance remains in the range of USD 9.98 to USD 10.06. Adjusted EBITDA for Q4 is expected to land between USD 1.37 billion and USD 1.40 billion, bringing full-year adjusted EBITDA to approximately USD 5.35 to USD 5.38 billion.

The company also reiterated its full-year capital return target of approximately USD 4 billion. Marriott International repurchased 3 million shares in Q3 for USD 800 million and has repurchased 9.7 million shares year-to-date through October 30 for a total of USD 2.6 billion. During the quarter, Marriott International also raised USD 1.5 billion through senior notes offerings, locking in long-term capital at rates between 4.20 and 5.25 percent.

How are institutional investors and analysts reacting to the Sonder termination and financial outlook?

Market sentiment remains positive. Analysts and institutional investors appear unconcerned by the Sonder exit, viewing it as a strategic housekeeping decision rather than a sign of broader trouble. Sonder’s default and resulting removal from the Marriott Bonvoy system are considered minor compared to the company’s overall financial trajectory. Buy-side focus has remained squarely on Marriott International’s earnings performance, development pipeline, and sustained Bonvoy momentum.

With its asset-light model, global brand architecture, and rapidly growing loyalty base, Marriott International continues to position itself as a stable, high-margin growth story in the post-pandemic hospitality sector. As macroeconomic conditions normalize and international travel rebounds, the company is expected to maintain its earnings expansion path while selectively refining its portfolio through acquisitions like citizenM and exits such as Sonder.

What are the key financial, strategic, and investor sentiment takeaways from Marriott International’s Sonder exit and Q3 update?

• Marriott International terminated its licensing agreement with Sonder Holdings due to Sonder’s default, removing all Sonder properties from the Marriott Bonvoy system.
• The company revised its 2025 net rooms growth outlook to approximately 4.5 percent but kept all other financial guidance unchanged.
• Third quarter net income increased to USD 728 million from USD 584 million in the prior year, reflecting stronger profitability even amid uneven global demand conditions.
• Adjusted EBITDA rose to USD 1.35 billion, supported by international RevPAR growth of 2.6 percent and continued luxury segment demand.
• Marriott Bonvoy membership expanded by 12 million in the quarter, reaching nearly 260 million members worldwide and reinforcing long-term direct booking and loyalty strategy.
• Marriott International added 17,900 net new rooms in the quarter, with international markets accounting for most of the expansion, and the global development pipeline remains above 596,000 rooms.
• Full-year adjusted EPS guidance remains between USD 9.98 and USD 10.06, and adjusted EBITDA guidance remains in the USD 5.35 to USD 5.38 billion range.
• The company continues to emphasize shareholder returns, repurchasing 9.7 million shares year-to-date through October for USD 2.6 billion and targeting USD 4 billion in capital returns for full-year 2025.
• Institutional investor sentiment remains positive, with analysts viewing the Sonder exit as strategically minimal and the broader financial model as stable and well-positioned for continued growth.