Sonder’s abrupt bankruptcy has reignited concerns over real estate tech business models—but industry experts, including AirDNA, say the short-term rental sector remains strong. Sonder’s downfall is tied to the lease-arbitrage model, which saddled the company with high fixed costs despite fluctuating income. According to AirDNA chief economist Jamie Lane, the core issue was applying a WeWork-style strategy to hospitality, not the viability of short-term rentals themselves. Lane emphasized that occupancy is up from pre-pandemic levels, and demand for whole-home vacation rentals continues to grow, reaffirming the resilience of the STR sector despite Sonder’s high-profile collapse.

(While Sonder’s occupancy never fully rebounded in some major cities) occupancy is up overall from before the pandemic.

Sonder’s collapse highlights flaws in the lease-arbitrage model—but AirDNA says short-term rental demand and occupancy remain strong post-pandemic.

Sonder, the WeWork of apartments, may be bankrupt, but the short-term rental business is healthy

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Sonder, the WeWork of apartments, may be bankrupt, but the short-term rental business is healthy