About

Following a strategic audit that revealed fragmented travel governance, inconsistent service delivery across brands, and diverging stakeholder expectations, our client decided to postpone a full RFP. Instead, they launched a structured renegotiation with incumbent TMCs—realigning the program while strengthening internal foundations.

Our client manages a $130M+ decentralized travel program across a portfolio of luxury brands. The renegotiation sought to raise service levels, increase pricing transparency, and lay the groundwork for potential future tendering, all while avoiding disruption and pacing transformation sustainably.

Ambition

The renegotiation aimed to:

• Reinforce service quality across brands, from VIP to standard travelers.
• Secure improved financial conditions with transparent pricing and incentives for longer-term commitments.
• Standardize contracts, SLAs, and KPIs across TMCs to enable group-level governance.
• Consolidate TMC relationships where leverage and efficiency gains were possible.
• Use renegotiation as a catalyst for internal improvements (OBT setup, payment harmonization, profile management).

Approach

Areka led a three-round negotiation cycle, supported by detailed analysis and stakeholder workshops:

Round 1 – Service & Scope Alignment

• Consolidated TMC scopes and pricing grids by country rather than by brand.
• Defined a unified Statement of Work and Service Level Agreements.
• Integrated M&E scope and capabilities into the review.

Round 2 – Pricing & Commitments

• Secured improved offers on online/offline and VIP pricing.
• Negotiated service credits, KPIs, and five-year contract incentives.
• Assessed alignment with the client’s operational and strategic objectives.

Round 3 – Final Optimization

• Extracted last improvements from incumbent TMCs.
• Ensured all TMCs adhered to standardized SLA/KPI structures.
• Finalized total cost of ownership (TCO) calculations and validated savings.

Achievement

Through this structured renegotiation, the client delivered RFP-level results while avoiding the disruption of a full tender:

• Service upgrades secured: 24/7 KPI integration, strengthened operational teams, dedicated VIP SLAs (e.g., 95% phone responsiveness).
• TCO stabilized or reduced: Average TCO decreased from 3.83% to 3.58% of spend, with significant improvements from key suppliers (GBT, F1S).
• Transparency achieved: Unified pricing grids per country, simplified surcharge models, and clear OBT admin fee structures.
• Contracts harmonized: All repatriated under French law with consistent annexes (security, data, SLA, KPIs).
• Internal leverage created: New contractual commitments now support internal projects (OBT harmonization, profile/payment standardization, M&E development).
• Financial benefits realized: Up to €1.1M over five years from optimized pricing and negotiated incentives/credits.
• Future-proof model designed: SLAs, KPIs, and scope aligned across all TMCs.
• VIP services redefined: Balancing expectations and costs (e.g., average VIP fee 223% higher than standard).
• Digitalization accelerated: Improved OBT fee structures and renewed focus on digital maturity.

Learnings & Next Steps

This case demonstrates that:

• Renegotiation can unlock progress when internal readiness for an RFP is limited.
• A phased approach allows alignment, simplification, and measurable gains without destabilizing operations.
• External expertise can catalyze internal change, when paired with a clear roadmap.
• Financial opportunities exist even in bilateral negotiation.

Next priorities for the client:

• Reinforce the internal travel team (notably for M&E).
• Launch governance dashboards with data-driven KPIs.
• Prepare for future tendering through internal harmonization.

Areka’s Value

A tailored sourcing strategy that combined benchmarking, structured negotiation, and change management, delivering tangible impact without forcing transformation ahead of internal maturity.