Sonder reports record revenue for Q2

Paul Stevens Paul Stevens Uploaded 11 August 2021

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US: Next-generation hospitality company Sonder has announced the strongest quarterly revenue in its history in financial results for the three months ending at 30 June 2021.

The company claims that this has been driven by a “robust” recovery of leisure travel demand and the continued rapid expansion of its Live Unit portfolio.

Sonder co-founder and CEO, Francis Davidson, said: “Q2 was an outstanding quarter for Sonder. We delivered our highest single quarter revenue in the company’s history and more than doubled RevPAR year-over-year.

“Our stellar results are a testament to our ability to attract and delight guests, as traveller preferences have evolved to seek out modern, tech-enabled spaces that fit a variety of needs and lifestyles. The inspired, tech-enabled design, consistent quality and compelling value that are hallmarks of the Sonder brand also position us to serve emerging travel trends such as long-term stays and digital nomadism.

“We continue to outperform traditional hotel RevPAR during the pandemic – by at least 40 per cent in each of the past two quarters. Our total portfolio continues to expand rapidly and we’re on track to surpass 18,000 units by end of year, which gives us confidence in our ability to hit the aggressive growth targets we’ve set for 2022 and beyond,” he added.

Sonder notably reported total revenue of $47.3 million, a 151 per cent year-on-year increase and 50 per cent rise on Q1, as well as a 30 per cent RevPAR increase on Q1.

The company also notched up average occupancy rates of 68 per cent, an increase by 11 per cent on the same quarter in 2020, and its total portfolio as of 30 June reached approximately 5,500 live units and 15,000 total live and contracted units.

In addition, Sonder announced that it was updating its outlook for the full year and the rest of 2021.

Total revenue was estimated to be between $180 and $190 million, increasing the initial outlook by four per cent to ten per cent, which implied a total annual revenue growth of 56 per cent to 64 per cent. At the same time, Sonder reaffirmed its outlook for an adjusted EBITDA loss of $257 million.

Sanjay Banker, president and CFO of Sonder, said: “Given the strong RevPAR outperformance through the first half of the year, and the rapid addition of new units to our portfolio, we are raising our outlook for 2021 total revenue. This increase from our initial outlook reflects Sonder’s belief that the recent surge in leisure travel recovery is sustainable and our proven ability to capitalise on this demand for better stays at an exceptional value.”

The rebound in travel demand was underscored in a recent Sonder report, conducted in partnership with Ipsos, which indicated that a majority of US adults have plans for personal travel in the coming months.

In the nationwide survey of US adults 18 years or older, roughly two thirds [62 per cent] of survey respondents indicated that they would travel for personal reasons before the end of 2021. Another six in ten [59 per cent] Americans were interested in being a digital nomad – or working remotely on a long-term trip – with interest higher among younger adults aged 18-34 [74 per cent], followed closely by those planning to travel with kids [69 per cent].

In April, Sonder announced that it had entered into an agreement to combine with special purpose acquisition company [SPAC] Gores Metropoulos II, sponsored by an affiliate of The Gores Group, to go public via a merger. As part of the transaction, Sonder is aiming to raise $650 million in cash proceeds from GMII before expenses, including fully committed PIPE [private investment in private equity] of $200 million from institutional investors

The combined hospitality company is also expected to have a pro forma enterprise value of $2.2 billion and over $700 million of net cash at closing.

More recently, Sonder announced the introduction of its corporate travel offering by launching on the Global Distribution System [GDS], as well as a number of partnerships with travel management companies and consortia.

Meanwhile, the company is set to enter its seventh city in Europe – Amsterdam – with the opening of a historic property built in 1860 overlooking the Vondelpark in the city centre.

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