Some things you don't need a financial statement to understand. As truck drivers, we just experience some things first hand and T/A falls into that category but first let's look at their competition:
Pilot/Flying J is now partially owned by Warren Buffet's company, Berkshire Hathaway. He paid $2.786 Billion for 38.6% of the company in 2017. The Haslams will retain 50.1% ownership of the company through 2023 when they will sell another 41.4% of the company to Buffet.
Berkshire Hathaway is estimated to have 1/4 of the company's value in cash. That's multiple BILLIONS of dollars. They are extremely liquid and financially stable. Pilot does charge for reserved parking but it is usually limited to small portions of the lot.
Love's is privately held so we don't have the same kind of market info about them. We have to trust what we see with our eyes and ears. They seem to have mastered the smaller to mid-size stop expansion strategy catering to both truck drivers and average car drivers. The truck stop portion is smaller and separate enough so that it doesn't intimidate non truck driving customers. Their properties are newer and well managed and, apparently, they do not need to charge for semi parking. That signals financial strength.
Travel Centers of America has been coasting on whatever positive name recognition it has had for years. Their sites are run down dumps and they've turned to gimmicky nonsense like naming locations after truck drivers to speak louder that the contempt they show towards drivers through their actions. Meanwhile, the toilet stalls have no toilet paper, truck repairs have a good chance of being done incorrectly and service is generally atrocious. For this luxury experience, T/A charges more frequently for parking that any of it's main competitors. They even enforce this policy at the point of a gun, going as far as shooting customers because THEY HAVE TO. They are desperate.
T/A hasn't been able to match the growth of Pilot/Flying J or Love's. They simply don't have the cash to develop new locations so they recently created a strategy of franchising the Travel Centers of America name to existing truck stops. The people who own these stops pay T/A a monthly fee for the right to use their brand and their computer/business systems. Question: Who here has experienced a T/A and thought "Man, THAT is an efficient, well run business system I'd like to pay for the privilege of duplicating that somewhere else?!?"
Since Pilot and Love's have been way more aggressive about expansion, my guess is that they have picked over the best of the existing independents. The one's who would turn to franchising with them now are failing and, like them, desperate.
On June 30, 2020, T/A issued 6.1 million shares of new stock, raising about $75 Million after expenses. The stock was originally priced at $21.88 but was reduced to $14.00 due to lack of interest. Since this money wasn't nearly enough, on December 14, 2020 T/A just borrowed another $200 Million from Citibank against all of their remaining assets. They are now officially tapped out. They've effectively maxed out their credit cards.
TravelCenters of America closes on $200M term loan
If you're already struggling financially, borrowing deeply doesn't help the situation. It only delays the inevitable. Where are they going to come up with the money to pay for this additional debt?!? Are they going to raise the margins on their already ridiculously priced food? Charge $30 a night for parking?!?
What have your experiences been like at T/A? Am I off base? If so, how?
Travel Centers of America is failing and will declare bankruptcy within five years.
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pilot got big by giving megas a price credit at the pump. drivers were then held hostage to that stop only.
when that happened ,I avoided them unless absolutely necessary and I do mean absolutely!
rookies trying to park and maneuver the lots was scary ! lol
I use independent stops as much as possible. I will use a TA or Petro before pilot/J or Loves. My fuel card gives me the better price at Ambest locations. Sap and then TA.
TA stock was sold at $14
December 2015 it was about $50
Today about $34.
No better time to get loan when the rates are so low. Except the loan ta got is at 6%. That is a high rate today. Maybe not in a couple years.
Franchising is the cheapest way to spread their outlets. That is what drives the demand. More outlets, the easier it is to sign the larger fleets to a national fuel plan.
8 out of 10 parking space is paid parking,
Iron Stomach, and Country Shame with never changing menu really paying off ^_^.
Not to mention 150$ per hour charge for service technicians
Seems like 200 million is not much money for TA. A new truck stop is around 20 million I think. The whole paid parking I think hurt them and changing to 60 gallons for a shower credit. Plus the restaurants closing and TA basically has nothing to offer. Only hot dogs and cold packaged sandwiches. I always thought it's like they don't want driver to stop at them anymore. They should give drivers a reason to stop in, not chase their customers away.
With the exception of a few great such as Clearwater or Albert Lee, I’ve seen a lot of them recently disgusting. The Covid signs are up for masks, but bathrooms look like you’re going to get hepatitis. The truckstops being so filthy is a direct reflection of poor moral of workers and the lack of leadership. Obviously, the leadership is not sharing their vision or upholding company values. For this company to remain in business in a very competitive market, how does T/A petro standalone from the competition? If it doesn’t it will not surviveLast edited: Dec 18, 2020
At the beginning of the year T/A added a broad who was an ex Bulgarian ambassador to the United States onto their board of directors. How does that make any sense?!? If you want someone with government ties so you can beg for government money, why wouldn’t you hire an American? I guess they just needed a reliable vote for the CEO adding all that debt and this Bulgarian wants the check that comes along with doing practically nothing for doing so.nredfor88 Thanks this.
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