Sonder began feeling an adverse impact from the Omicron outbreak in late November 2021, and that spilled over into January and February, hurting its booking numbers. Still, the forecast is for a 2022 revenue jump of 100 to 110 percent as it inks new deals in more lucrative markets.
Greater visiblity is often a double-edged sword for newly public companies. But in Sonder’s inaugural earnings call on Wednesday, chief financial officer Sanjay Banker said that increased exposure has been a good thing, enabling it to close better deals with developers in what the company calls internally “A markets.”
“This transaction itself has allowed us to create more visibility, transparency, confidence in the company, which allows us to get better deals,” Banker said. “And so period-to-period, quarter-to-quarter, sort of the market zeitgeist may emphasize different things, but we’re seeing a broad tailwind, and that’s what Francis described as a flywheel effect.”
Revenue per available room tailwinds include deal signings in Europe and a tilt in some locales toward hotels versus multifamily dwellings.
That was a positive note, after Sonder shared that the Omicron outbreak impacted bookings in January and February, and it forecast that adjusted earnings before interest, taxes, depreciation and amortization losses would widen to around $90 million in the first quarter of 2022 as revenue per available room “remains in recovery mode.”
If things turn out along the lines of the forecast, the company’s adjusted EBITDA loss margin would improve year over year to negative 120 percent from the prior negative 167 percent.
Still, the company, which operates both hotels and multifamily units that it leases from real estate owners, painted a portrait of momentum in 2022.
In the fourth quarter Sonder saw its revenue jump 204 percent to $86.7 million. The company saw its net loss worsen 7 percent year over year to $77.3 million. Its occupied nights rose 36 percent in the fourth quarter to 1.4 million.
On the upside, Sonder’s portfolio of live units jumped 69 percent to 7,600 in the fourth quarter, but supply chain issues and a labor shortage contributed to slowing that effort.
“We still have those signed properties that will go live, but the schedule at which they go live evolves partly due to the well-documented supply chain and labor shortage issues that have led to building deliveries being slowed,” Banker said “But we still expect those buildings to go live, but the changes in those calendars and schedules are what drive changes to the volume forecast.”
Among new initiatives, Sonder launched a corporate travel business mid-2021. It has around 100 new corporate travel accounts, is live in global distribution systems, and signed partners with several travel management companies.
Sonder, the San Francisco-based startup that operates hotels and leases apartment buildings for short-term rentals, made its stock market debut in January in a special purpose acquisition company merger, and saw its share price drop about 8 percent.
Founded in 2014 by Francis Davidson, Lucas Pellan, and Martin Picard, Sonder merged with the Gores Metropoulos II SPAC, and Sonder’s common stock began trading under the symbol SOND on Nasdaq.
Co-founder and CEO Davidson said Sonder in the fourth quarter generated 44 percent of its bookings directly on Sonder.com. With $400 million in net proceeds from its January stock market listing, as well as ending 2021 with $70 million in cash on hand, Davidson argued that Sonder is well-positioned to capitalize on market opportunities and to lean into the travel recovery.
Photo credit: A three-bedroom Sonder apartment in Chicago. Sonder