WESTLAKE, Ohio — Over the past few years, TravelCenters of America LLC has been growing its service offerings to truckers, its core customers. While one initiative is proving to be a homerun for the company, another is a bit slow out of the gate.
TravelCenters launched Reserve-It in October 2012, and the initiative appears to be giving the truck stop chain an ongoing edge. According to CEO Tom O'Brien, Reserve-It continues to grow in acceptance and profitability, and "probably" added in excess of $1 million in the first quarter of 2015. The program allows drivers to reserve a parking space at select TA and Petro locations in advance of their arrival.
"I think the truck parking shortage in the United States has helped that a little bit, but it's provided a market where we can provide an additional service to drivers ... that, at least to date, most of our competitors — probably without exception on the large competitors — they haven’t been able to execute that kind of program," O'Brien explained during the company's first-quarter earnings call Thursday.
The success of Reserve-It may also have to do with the fact that TravelCenters "has a lot more parking, on average, than a lot of our largest competitors." The program has proven to be "a way, most importantly, of providing a service to our customers that they couldn’t find elsewhere and frankly find quite valuable," O'Brien added.
TravelCenters also continues to make progress in its partnership with Shell Oil Products US, which calls for the development of up to 200 liquified natural gas (LNG) lanes at up to 100 existing travel centers. The partners opened the fourth LNG location last week and "are in active pursuit of a handful of others for this year or early next" year, the chief executive reported Thursday.
"The ramp up, if you will, of demand for LNG is pretty much as we expected. It's a long process that, in my view, hasn't yet reached a tipping point," O'Brien said. "We have talked to a number of customers that are more bullish about LNG for various reasons and, like I said, we haven't reached a tipping point but there still are discussions."
His sense is that the recent "decline in diesel price ... may, on the margin, have slowed some of the decision points within our fleet customers and probably in some cases, causes a cessation of talking about LNG. But I am speculating a little bit."
As far as the impact on TravelCenters' business, the financial impact in the early stages will be pretty small. On the profitability side, the company gets paid a modest amount as more LNG lanes open. More importantly, there is a near total lack of financial impact on the capital side because Shell is funding that capital, the CEO explained.
"It's slow going, but that is as expected," O'Brien said.
The Westlake-based company's travel centers operate under the TravelCenters of America, TA, Petro Stopping Centers and Petro brand names and offer diesel and gasoline fueling, restaurants, truck repair facilities, travel/convenience stores and other services. Its nationwide business includes travel centers in 43 U.S. states and Canada. TravelCenters also operates convenience stores with retail gasoline stations principally under the Minit Mart brand name.