Sonder: Corporate Travel Upside Still on P&L Horizon | Tech US News


Sonder continues to focus on its corporate travel potential, but is falling behind 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 launching its corporate travel program last year. Sonder has hired corporate travel veteran Kristin Richter, formerly with Radisson, to drive the effort, but the sector has not fully materialized in the post-Covid-19 return to business travel.

Sonder chief executive and co-founder Francis Davidson pointed to a “very low baseline” of business travel in Sonder’s P&L, but stressed the company was still in the early stages. Davidson said the company claimed 100 corporate customers in the fourth quarter of 2021 and closed an additional 250 accounts in the first quarter of 2022.

“As we’re adding these corporate accounts, hopefully at a much faster rate … that could be kind of a net gain for us,” Davidson said. “There’s a huge white space for our business to generate corporate travel, and we’re really just getting started.”

Sonder added Michelle Frymire, formerly CEO of travel management company CWT, to its board of directors in September.

Q3 Performance & Pipeline

Sonder’s third-quarter revenue rose 85 percent year-over-year to $125 million, driven by increases in average daily rates as well as a restructuring earlier this year. ADR was $189 in the quarter, compared to $184 in the same period last year. The company’s revenue per available room increased to $158 from $126 a year earlier. Occupancy reached 84 percent, 16 percentage points higher than in the third quarter of 2021.

Sonder’s third-quarter live units grew 43 percent year-on-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 challenges. But aspects the company can control include closing development deals.

“There is a built-in growth of 110 percent [year over year] which will come from our contracted properties. … We have more properties that are under contract, not yet live, than we have today,” Davidson said.

Going forward, the company’s main goal is to “increase the size of our global portfolio to cover non-unit costs and drive overall profitability,” said Sanjay Banker, Sonder’s chief financial officer. Banker will step down next year and join the board of directors.

RELATED: Sonder Q2 results


Source link

Please disable your adblocker or whitelist this site!