Sonder: Corporate Travel Upside Still on P&L Horizon
Sonder continues to focus on its corporate travel potential but is falling short on pipeline development due to supply chain and development “challenges,” company officials said Wednesday during Sonder’s quarterly earnings call.
Attracting more transient business travel has been a key initiative for the company since its corporate travel program launched last year. Sonder hired corporate travel veteran Kristin Richter, formerly with Radisson to drive the effort, but the sector hasn’t materialized fully in the return to business travel after Covid-19.
Sonder CEO and co-founder Francis Davidson pointed to a “very low baseline” of business travel in Sonder’s profit and loss statement, but underscored the company was still in the early innings. Davidson said the company claimed 100 corporate clients in Q4 2021, and in Q1 2022 closed 250 additional accounts.
“As we’re adding these corporate accounts, hopefully at a much more rapid speed … that could be kind of a net gain for us,” Davidson said. “There is enormous white space for our business to generate corporate travel, and we’re really just getting started.”
Sonder added Michelle Frymire, previously CEO of travel management company CWT, to its board of directors in September.
Q3 Performance & Pipeline
Sonder’s third quarter revenue increased 85 percent year over year increase to $125 million, spurred by average daily rate increases as well as a restructuring earlier this year. ADR came in at $189 for the quarter, up from $184 in the same period a year prior. The company’s revenue per available room increased to $158 from $126 one year prior. Occupancy hit 84 percent, up 16 percentage points from Q3 2021.
Sonder’s live units in the third quarter grew 43 percent year over year to 9,000. The company’s total portfolio grew 17 percent to 18,900. Growth was slower than expected, which Davidson attributed to supply chain and labor-side challenges. But the aspects the company can control include closing development deals.
“There is 110 percent embedded growth [year over year] that will come from our contracted properties. … We have more properties that are contracted, not yet live, than we have live today,” Davidson said.
Looking ahead, the company’s main goal is “increasing the size of our live overall portfolio to cover non-unit costs, and drive to overall profitability,” Sonder CFO Sanjay Banker said. Banker will step down from his role next year and will join the board of directors.
Angelique Platas www.businesstravelnews.com