For property owners evaluating management partners, understanding why one of the industry’s most well-funded companies collapsed reveals critical insights about sustainable business models in vacation rental management. Everyone searching for the best property management partner eventually asks the same question: what’s the actual difference between these companies? Sonder’s bankruptcy filing in November 2025 provides a clear answer. Their master lease model required fixed rent payments to property owners regardless of occupancy—creating unsustainable obligations when demand softened. Our revenue-sharing approach works differently: we align our success directly with yours, eliminating the fixed-cost structure that proved fatal to their business model.
TLDR:
- Sonder’s master lease model collapsed in bankruptcy, leaving property owners unpaid and stranded.
- AvantStay’s revenue-sharing model aligns incentives and eliminates fixed lease bankruptcy risk.
- Luxury group properties generate higher yields than solo traveler units through premium nightly rates.
- AvantStay manages 2,300+ properties with $5B+ AUM through vertically integrated operations.
- AvantStay combines proprietary revenue tech with Marriott Bonvoy access to 140M+ members.
What is Sonder?
Sonder operated as a short-term rental company that positioned itself somewhere between traditional vacation rentals and hotels. Rather than managing properties on behalf of owners, Sonder leased properties through master lease agreements, controlling approximately 7,500 units at its peak. This meant Sonder became the tenant, then subleased those units to guests through its own booking channels.
The company’s approach relied heavily on tech to minimize operational costs. Guests accessed properties through app-based controls rather than interacting with front desk staff. Sonder marketed this contactless experience as convenient for travelers while keeping overhead lean.
For property owners, the master lease model meant predictable rental income without direct guest management responsibilities. Sonder handled everything from furnishing to guest services. However, this structure also transferred significant financial risk away from owners and onto Sonder itself, as the company was responsible for maintaining occupancy and profitability regardless of market conditions.
That risk became reality when Sonder filed for Chapter 7 bankruptcy liquidation in November 2025. The collapse left property owners scrambling as their rental operations ceased, often with little notice. For property managers considering partnerships today, Sonder serves as a cautionary example of how aggressive growth and master lease structures can create systemic vulnerability when market conditions shift.
What is AvantStay?
We take a fundamentally different approach to property management. Instead of leasing properties from owners, we partner with you through a revenue-sharing model where your success directly drives ours. This alignment means we’re incentivized to maximize your returns rather than simply covering our own fixed lease obligations.
Our full-service management covers the entire property lifecycle for luxury vacation rentals. We manage over 2,300 properties representing more than $5 billion in assets under management. This scale gives us institutional capabilities while maintaining the personalized attention your high-value asset deserves.
The Lighthouse owner portal provides real-time visibility into your property’s performance. You can track revenue, occupancy, and maintenance activities whenever you want, eliminating the opacity that plagues traditional property management relationships. This transparency reflects our accountability to you as the actual owner, not just a landlord we’re subleasing from.
Our award-winning design team transforms properties into premium destinations that command higher nightly rates. Combined with our proprietary revenue management algorithm that analyzes thousands of data points including local events and seasonal demand patterns, we consistently outperform local market rates. Your property isn’t just managed but actively optimized for maximum returns.
Business Model and Financial Risk
The fundamental difference comes down to who bears the financial risk. Sonder’s master lease structure required the company to pay fixed rent to property owners regardless of whether guests actually booked those properties. When demand softened, Sonder still owed those lease payments while revenue declined, creating an unsustainable cash drain that contributed directly to their bankruptcy filing.
Property owners discovered too late that guaranteed payments mean nothing when the company paying them goes insolvent. Many owners reported receiving no rent for months before the collapse, while their properties sat in operational limbo or sustained damage without proper maintenance.
Our revenue-sharing model works differently. We earn a percentage of the revenue your property generates, which means our financial success is directly tied to yours. When your property performs well, we both benefit. When market conditions challenge occupancy, we share that impact rather than hemorrhaging cash to cover fixed obligations we can’t sustain.
This structure eliminates the balance sheet risk that destroyed Sonder. We’re not leveraging our entire operation on lease obligations that become liabilities during downturns. Instead, we’re building sustainable partnerships where both parties have aligned incentives to maximize property performance over the long term.
Property Type and Target Market Focus
Sonder focused primarily on urban apartments and hotel-style units serving solo travelers and business guests. These smaller properties generated modest nightly rates appropriate for single occupants, leaving significant revenue on the table during peak leisure travel seasons when families and groups sought accommodations. The business model optimized for consistency and efficiency rather than maximizing per-property revenue potential.
We concentrate on luxury vacation homes, large estates, and boutique hotels specifically designed for group travel. Properties in our portfolio typically accommodate 8 to 20+ guests, with some estates handling wedding parties and corporate retreats of considerable size. This group-first approach fundamentally changes the revenue equation for property owners.
When you rent to a group of twelve instead of a solo traveler, willingness to pay increases exponentially. A family splitting costs across multiple couples can justify $2,000 per night far more easily than an individual can rationalize $300. Our properties are designed with oversized dining tables, multiple primary suites, and curated social zones that make these premium rates feel justified rather than excessive.
Our award-winning design team creates spaces built for social media shareability. Instagrammable moments drive organic marketing that attracts guests willing to pay for experiences, not just accommodations. This directly impacts your bottom line through higher average daily rates and stronger occupancy during peak leisure seasons when nightly rates climb highest.
Revenue Management and Owner Returns
Sonder invested heavily in tech infrastructure for guest experiences, but those operational efficiencies couldn’t fix the core problem: fixed lease obligations that became anchors when occupancy dropped. No amount of algorithm optimization could change the fact that the company owed rent regardless of whether rooms filled. Property owners who believed guaranteed payments represented security learned otherwise when those checks stopped arriving.
Our proprietary revenue management algorithm maximizes your actual income. The system analyzes thousands of data points including local events, flight patterns, and seasonal demand to adjust rates dynamically. When a major conference books nearby hotels, your rates automatically increase. When flight prices to your market drop, we capture the demand surge before competitors react.
The Lighthouse portal gives you unprecedented transparency into these decisions. You see exactly how pricing changes impact your revenue in real time, along with occupancy trends and maintenance costs. This visibility allows you to understand your returns rather than simply trusting a partner who treats your asset as a line item on their balance sheet.
Our exclusive Marriott Bonvoy partnership provides a massive distribution advantage. Access to 140+ million members means we’re marketing your property to qualified, high-value guests who can earn and redeem points. These travelers typically book longer stays at higher rates compared to bargain hunters on unmanaged listing sites, directly improving your yield.
Operational Infrastructure and Owner Protection
Sonder’s software-first operational model prioritized efficiency over resilience. When the company collapsed, that lean approach offered no safety net for property owners. Guests were ordered to vacate within 24 hours, creating chaos as properties suddenly emptied. All employees were laid off, leaving owners without support to manage ongoing reservations, handle maintenance issues, or address guest complaints.
Property owners faced immediate operational crises. Furnishings belonged to Sonder’s now-defunct entity. Guest communication systems went dark. Properties needed urgent cleaning and inspection, but the entire operational infrastructure vanished overnight. Owners discovered that relying on a partner’s tech stack means nothing when that partner ceases to exist.
We manage every touchpoint of your property lifecycle through vertically integrated operations. Our in-house teams handle interior design, maintenance coordination, and guest support directly rather than relying on fragmented contractors. When issues arise, you contact one organization that controls the entire operation and can actually solve problems.
Our Safe Stay program includes noise and security monitoring that protects your asset from damage while maintaining neighbor relations. We manage permits and tax compliance in your local market, handling regulatory complexity that can expose owners to significant liability if mishandled. These aren’t outsourced functions that disappear during a crisis but core capabilities we maintain across our entire portfolio.
The 24/7 guest support team operates continuously, addressing issues before they escalate into property damage or negative reviews that hurt future bookings. This institutional-grade infrastructure protects your property value through consistent, professional operations that don’t depend on a single vendor’s financial health.
Why AvantStay is the Better Choice
Sonder’s master lease model initially attracted institutional landlords who valued predictable cash flow over variable returns. The appeal was straightforward: guaranteed monthly payments without exposure to occupancy fluctuations or operational headaches. For some property owners, that certainty justified accepting lower returns than active management might generate.
That certainty proved illusory. Sonder’s bankruptcy left landlords holding long-term master leases facing pennies on the dollar as unsecured creditors. Properties that owners expected would generate steady income instead became stranded assets requiring immediate operational intervention during a liquidation.
We represent a fundamentally different proposition. Our revenue-sharing model eliminates the systemic bankruptcy risk that destroyed Sonder because we don’t carry fixed lease obligations that become unsustainable during downturns. When your property performs well, we both benefit. When markets soften, we adjust together rather than collapsing under obligations we can’t meet.
Our focus on luxury group travel generates yields that master lease payments could never match. Properties designed for 12+ guests command nightly rates that dramatically exceed what solo travelers or couples pay, directly improving your returns. Combined with our Marriott Bonvoy distribution and proprietary revenue management, we consistently outperform local markets.
For property owners seeking a reliable partner that maximizes returns while protecting asset value through transparent, vertically integrated operations, we offer what Sonder couldn’t: sustainable alignment and institutional-grade management built to last.
Final Thoughts on Protecting Your Rental Investment
Choosing between vacation rental management models means understanding who bears the risk. Sonder’s bankruptcy left property owners stranded because fixed lease obligations became unsustainable. We share revenue instead, which means your success is our success. That alignment creates better returns, transparent operations, and a partnership built to weather any market conditions.
FAQ
How should I decide between a revenue-sharing model and a master lease agreement for my property?
Consider your risk tolerance and income goals. Revenue-sharing aligns your partner’s success with yours, creating sustainable incentives to maximize returns, while master lease agreements transfer financial risk to the operator—which becomes problematic if that company faces insolvency, as Sonder’s bankruptcy demonstrated when guaranteed payments stopped entirely.
What makes group-focused properties generate higher returns than properties designed for solo travelers?
Properties accommodating 8-20+ guests command exponentially higher nightly rates because groups split costs across multiple parties, making $2,000 per night far more justifiable than $300 for a single traveler. Design elements like oversized dining tables, multiple primary suites, and social zones support these premium rates while attracting high-value leisure bookings during peak seasons.
Who is AvantStay’s property management best suited for?
We’re ideal for owners of luxury vacation homes, large estates, and boutique hotels who want hands-off management with transparent performance tracking. High-net-worth investors seeking passive yield on premium assets and institutional partners managing multi-unit portfolios benefit most from our vertically integrated approach and Marriott Bonvoy distribution access.
What happens to my property operations if my management partner goes bankrupt?
Sonder’s collapse left owners without operational support, guest communication systems, or staff within 24 hours, creating immediate crises around furnishings, maintenance, and ongoing reservations. Our revenue-sharing structure eliminates the fixed lease obligations that caused Sonder’s bankruptcy, while our vertically integrated teams—from design to maintenance to guest support—remain stable because our financial health depends on your property’s performance.
Can I track my property’s revenue and occupancy in real time?
Yes, the Lighthouse owner portal provides complete transparency into your property’s performance whenever you want it. You can monitor revenue, occupancy trends, maintenance activities, and see exactly how our dynamic pricing decisions impact your returns, eliminating the opacity common in traditional property management relationships.
