John J. Russell Jr. - A Catalyst For Change

By Rosalie E. Leposky

The timeshare industry is changing, and John J. Russell Jr., CHA, CHME, is riding the crest of that wave. As president and chief executive officer of Resort Condominiums International, the world's largest timeshare-exchange company, Russell has plans for RCI that promise to revolutionize the exchange business.

"Today's consumers want almost total flexibility and one-stop shopping," he emphasizes. "Many timeshare owners are dual-income families, and their time is extremely important. They want more flexible vacations and a timeshare point systems, with points they can use as global currency for anything they desire, including airline tickets, car rentals, river rafting, or a hot-air balloon ride."
 John J. Russell Jr.

"Today's consumers want almost total flexibility and one-stop shopping," he emphasizes. "Many timeshare owners are dual-income families, and their time is extremely important. They want more flexible vacations and a timeshare point systems, with points they can use as global currency for anything they desire, including airline tickets, car rentals, river rafting, or a hot-air balloon ride."

Russell, 52, is a veteran hotel executive with a diverse background in marketing, sales, and operations. He already was a high-ranking officer in Cendant Corporation, RCI's corporate parent, when asked by Henry R. Silverman, Cendant's president and chief executive officer, to assume the top leadership post at RCI and the vice-chairmanship of Cendant's travel division. After six months of intensive research involving discussions, study, and travel, Russell has formulated wide-ranging plans for RCI that he expects will reshape the entire industry. They include:

An RCI points system that will function as a global currency for consumer members and affiliated resorts. He hopes to develop and launch it within the next year.

Convertibility in the points system, so points can be used for a timeshare experience or something else, and so the purchase of something else will generate points that might be used in a timeshare setting.

A platform enabling all 32 brands in the Cendant portfolio to offer mini-vacations at RCI-affiliated timeshare resorts.

Creating other new sources of lead generation for timeshare sales.

Developing and launching a worldwide RCI resort brand.

Creating a new platform for Cendant brand loyalty.

Providing a complete range of services to help existing timeshare developers maximize their success, and to help prospective timeshare developers enter the business.

"We've held several meetings to identify RCI's global mission and strategic objectives, and decide how to get there," Russell says. "It is important to develop a strong economic model that can be utilized by current hotel developers and that helps to bridge the gap between hotel and timeshare developers."

Being Hospitable to Hospitality

Russell's leadership of RCI also puts him in a position to influence how the American Resort Development Association and the timeshare industry as a whole relate to the mainstream hospitality industry. Because most of the early timeshare developers came from a real-estate background, they themselves -- and most hoteliers -- tended initially to view timesharing as distinct and very different from the hotel business. This image still lingers to some extent, despite Marriott Corporation's involvement in timesharing since 1984 and the more recent participation of many other large brand-name hospitality companies.

In 2001, Russell will be chairman of the 11,000-member American Hotel & Motel Association. Earlier in his career, in 1988 and 1989, he was president of the 6,000-member Hospitality Sales and Marketing Association International. He will be the first person to hold both of these important hospitality positions. Could the ARDA chairmanship be far behind?

"As AH&MA chairman, John will bring a lot of excitement and enthusiasm to the position, and he will involve everyone," says Thomas F. Hewitt, CHA, a long-time friend and former Sheraton Corporation executive who now is chairman and chief executive officer of Interstate Hotels Corporation in Pittsburgh, Pennsylvania.

One of the biggest and most amazing differences Russell has found between timesharing and the hotel industry is that "hoteliers from big and small companies sit down and talk about their industry -- about what works and what does not. There are no secrets. Timesharing is different. Everyone is very protective of their trade secrets.

"The AH&MA Education Foundation has developed great training programs for hospitality managers and employees in both English and Spanish, similar to what ARDA should provide for timeshare employees. If AH&MA has something, there is no reason ARDA should not piggyback on their successful programs.

"There are opportunities for both organizations to take advantage. We are members of the same hospitality industry, the world's number one industry, and we need to find ways to bring timeshare and the rest of the hospitality industry together."

ARDA President Cynthia A. Huheey also sees Russell's AH&MA leadership role as "an opportunity for both the hotel and timeshare industries" and says AH&MA and ARDA already have begun to explore possibilities for cooperation and joint activities.

A Small-Town Boy

Russell was born in 1947 in New Castle, Delaware, a historic small town on the Delaware River. He is the oldest child of John J. Russell, Sr. (1921-1989) and Mary L. Russell, 75. "For over 30 years my father ran the power plant for Chrysler Corporation's assembly plant in Newark, Delaware," John Jr. says. "He served in the Navy during World War II, and until a bridge was built, he operated a ferryboat between New Castle, Delaware, and New Jersey.

When he was about four years old, the Russell family moved to Wilmington Manor, Delaware, where his mother still lives. She likes to walk and enjoys her grandchildren. "Johnny always encouraged us to travel, and brought us things from the places he's visited," she says.

An early influence in Russell's life was his high-school English teacher, Louis Trinkhaus. "He taught English and English literature and also was the school's drama coach. He always challenged his students to be better," Russell recalls.

Russell tried out for school plays and at one time considered an acting career or becoming a Methodist minister like The Rev. Dr. Brooks E. Reynolds, the father of his close friend, Bruce C. Reynolds. "Mostly, from ninth grade on I wanted to attend West Point," says Russell.

"John's a year older, but we were best friends in high school," recalls Reynolds, a high-school teacher and Delaware state legislator. "The Russells lived about two blocks away. John was active in the Methodist Youth Fellowship at my father's church and sang tenor to my more baritone voice in the church choir. John and I imitated the Beatles and other popular music groups in a school talent shows together.

"We played on different Little League baseball teams. John's father coached Johnny's team." Russell played second base; Reynolds was a catcher.

"John's always been a sharp dresser. In high school his trademark was to wear tight, well-polished saddle shoes," recalls Reynolds.

Russell was a member of the National Honor Society and participated in varsity tennis and cross-country field and track events. "I still play tennis whenever I can," he says.

"Johnny always attracted attention," says his younger brother, Dean. "He always talked and told jokes. In high school I could see that everyone admired and wanted to be like my older brother, who was always in the thick of everything as student-council president and as a member of the honor society. Academics did not come easily to Johnny, but he worked hard in high school and finished in the upper 10 percent of his class."

"Johnny ran for several school offices, and usually won," says his mother. "When he ran for and was elected student-council president, he was disappointed that the girl running with him for vice president was defeated. Her defeat took the pleasure out of his victory. He hated to see anyone lose out on anything."

On to West Point

Russell graduated from William Penn High School in New Castle in 1965. Delaware Senator John Williams (R) placed John, and later Dean, on the competitive Congressional appointment list for the U.S. Military Academy at West Point, New York. "I was the first person for a long while from our community to go to West Point," he says. "Five years later, my brother, Dean, followed me. I started at West Point with 1,201 freshman classmates, of whom 801 graduated." John received his Bachelor of Science degree in general engineering in 1969. Dean graduated from West Point in 1974, and returned there to teach physical education from 1991 to 1996.

Dean remembers that when he was in high school and John was at West Point, "Johnny always was looking after classmates who came from all over. When they were homesick, he would bring them to our Delaware house."

Most people attending West Point come from military families, says Dean. "It is unusual for brothers without a military background to both go to a military academy. Our military education taught my brother and me how to lead people and manage things."

Some of John Russell's instructors at West Point were:

Tennis great Arthur Ashe (1943-1993), Russell's tennis coach, who was a second lieutenant in the U.S. Army from 1966 to 1968.

Brigadier General Peter Miller Dawkins, a 1959 West Point graduate, Heisman Trophy winner, and Rhodes scholar. Dawkins was a social-science instructor from 1966 to 1968. In 1988, he ran unsuccessfully as the Republican nominee for the U.S. Senate from New Jersey.

General Alexander Meigs Haig Jr., a 1947 graduate who served as Regimental Commander of the U.S. Corps of Cadets from 1967 to 1969. Later he would become U.S. Secretary of State.

General H. Norman Schwarzkopf, a 1956 West Point graduate who taught fluid mechanics in the department of mechanical engineering from 1964 to 1965 and 1966 to 1968. He was a major when Russell took his class. In 1992, he retired as a four-star general after commanding U.S. troops in the Persian Gulf War.

Col. John J. Cook Jr. For more than six years, Cook was assigned to West Point's department of tactics, where he was responsible for Company B2 (John Russell's company) from 1965 to 1967. Now a national sales director for Primerica Financial Services, a division of City Group, Cook also serves as president of the Yachtsman Horizontal Property Regime, the timeshare owners' association for Yachtsman Resort in Myrtle Beach, South Carolina.

"My wife, Priscilla, was reading the cover story of the January-February 1999 issue of RCI Premier magazine that I had received," Cook says. "She told me that RCI's new president was a West Pointer. I immediately recognized John's picture."

"After reading the Premier article, Cook sent me a handwritten note," Russell says.

Five Years in the Army

In the 1960s, many West Point cadets received a Corvette as a graduation present. "When Johnny graduated, he received a gold Corvette convertible, and announced he was neither going to get married anytime soon nor come back to West Point," says Dean. "Neither was true. He's been back many times, and within six months he and Betsy were married."

After graduation Russell was posted first, in September of 1969, to the Airborne School at Fort Benning, Georgia, for officer training; then to Baumholder, Germany; and on to Vietnam.

On the way to Fort Benning, Russell stopped at Fort Bragg, North Carolina, to visit a former Academy roommate, Mark L. Waple, now an attorney in nearby Fayetteville. In the spring of 1969, Mark's father, Colonel Louis A. Waple, was commandant of the John F. Kennedy Center for Military Assistance at Fort Bragg. Across the street from the Waples lived Colonel Charles E. "Pete" Spragins (now a retired major general), head of the 82nd Airborne Division, who had a daughter named Elizabeth.

"A blind date was arranged for John and our neighbor's daughter, Betsy Spragins," says Waple. Thereafter, Russell and Betsy stayed in touch.

"In the fall of 1969," Dean recalls, "Johnny and I went to the Duke football game. Over the announcement system came a page for him to meet a Col. Spragins. The next thing we knew, we were going to Fort Bragg in January for his wedding." Later, Russell was best man at Mark Waple's wedding. Waple's wife's name, coincidentally, also is Elizabeth, though her nickname is "Buff."

"Betsy and I dated for five or six months," says Russell. "We were married in January of 1970, just in time for us both to go to Germany. Over the years, Betsy has been many things. She was a bank teller when we met. She has been an assistant in a dental office, modeled, and has been a retail sales agent and a Realtor. "Betsy's father was transferred to Hawaii to be commander of the Pacific Forces," says Russell. "When I was posted to Vietnam in mid-1972, she was pregnant with our son, so she went to Hawaii to be with her parents, and John J. "Jess" Russell III, now 27, was born there.

"For my first six months in Vietnam, I was assigned to the Military Assistance Command Vietnam at Vietnam's Non-Commissioned Officers Academy, where I taught military tactics. The school was just north of Saigon in the ocean town of Nha Trang, where in my time off I caught big lobsters." During the next four months, assignments took Russell all over Vietnam. "Most of the time, my family did not know where I was or what I was doing," he says.

Russell left Vietnam in mid-1973 and returned to Fort Benning. "I was a captain and was scheduled take an advanced officer-training course when I made the decision to leave the service," he says. "To give us some civilian-type experience, fellow West Pointer Ken Johnson and I were assigned to manage the two Officers' Club golf courses on the base." His first marketing project was to increase average checks, covers, and traffic. To achieve that goal, he created the Benning Burger -- a hamburger with onions.

A Creative Marketer

"With the assistance of an executive-search firm that helps military people find jobs in the corporate world, I started to hunt for a job," he says. At the time, the firm was Lendman Associates in Virginia Beach, Virginia. It became Lendman Group in 1978 and was purchased by Kaplan Education Centers in 1997. "Strange thing!" Russell declares. "Lendman Associates hired me in 1974 for its Washington, D.C., office to set up job fairs for active-duty officers preparing to leave the military. My responsibilities included working with the Marriott hotels to set up weekend fairs and bringing in 150 to 300 businesses to interview the officers."

Russell became enthralled with the hotel side of his job and received offers from Marriott Corporation and ITT Sheraton Corporation. In 1974, he accepted a junior marketing and sales position at the Sheraton Park Hotel in Washington, D.C. With 1,400 rooms, it was then the largest hotel in the District of Columbia.

Russell was hired by William J. Hanley, the hotel's manager of sales, tours, and travel, who became a longtime professional and personal friend. "At Sheraton, John was enthusiastic about work and life in general," says Hanley. "Every time he signed a decent contract or agreement, he would jump up and down and yell, 'Looking good!' At about 8:30 one morning, I was meeting with a client. Nearby, John was opening his mail. His yell scared my client."

A creative marketer, Russell is remembered for an event he created to generate ballroom revenues on a Super Bowl Sunday. When the ballroom otherwise would have been empty, he transformed it into a football stadium. The hotel sold tickets to see the game on a big-screen television, and sold football-related items in the stands.

Russell used a M.A.S.H. theme for an American Society of Association Executives (ASAE) meeting. He pitched a tent in the hotel, had a cookout, and fed everyone beans. "Hotel employees wore white hospital jackets and surgical scrub clothing," recalls Hanley. "Guests were offered tomato juice from intravenous bottles, served in paper urine cups. Hospital gurneys were used as baggage carts."

Between 1974 and 1978, Russell held several job titles at the Sheraton Park Hotel. Then he was promoted to director of sales and marketing for the 1,200-room Sheraton Boston Hotel & Towers and given corporate responsibilities as director of corporate sales training programs. In Boston, his new boss was Hewitt, then the Boston Sheraton's vice president and general manager.

"John was incredibly creative," Hewitt recalls. "He devised events to draw people into the hotel, and turned even bad weather into a profitable event. One winter blizzard caught Bostonians by surprise. No one could check out. From that experience, John created later -- when no blizzard was forecast -- a weekend package for people willing to pretend there was a blizzard.

"Later, after I left Boston, John was given a promotion that sent him back to Washington. Later still, I was promoted to president of Sheraton's North American division, and again I was John's boss."

A Family Crisis

In 1980, the Russells' son, Jess, became ill with chronic myelogenous leukemia at the age of seven. "I was pregnant with our daughter, Elizabeth, when the doctors diagnosed Jess's illness," says Betsy Russell. "We learned the only cure was a perfect bone-marrow match. There was a one-in-five chance Elizabeth would be a perfect match. At three weeks of age, she was typed and was a perfect match -- but she couldn't donate until she was three years old. Today we have donor tissue banks, but in 1982 only a few places with long waiting lists offered bone-marrow transplants."

Chemotherapy kept Jess alive until Elizabeth was old enough to donate bone marrow. When Jess was 10 and Elizabeth three, the entire family moved to Seattle so he could be treated in a germ-free environment at the Fred Hutchinson Cancer Center, a pioneer in bone-marrow transplant research. "The 30 days prior to the the transplant and the year after were hard," recalls Betsy. "We spent four months in Seattle with both kids."

"Jess's illness was tough for everyone," says Dean Russell. "He had an adult form of leukemia and was not expected to live. Eleven of the 12 people treated with him died. In remission, he still takes daily anti-rejection medications and can never compete in sports."

During this trying period in 1982, the Sheraton Corporation was very supportive, assigning John to help open the new 840-room Seattle Sheraton Hotel & Towers so he could continue to work and be with his family. When the Russells returned to Washington, D.C., John resumed his sales and marketing responsiblities for all of Sheraton's east-coast properties. At this time his new boss and business mentor was Paul R. O'Neil, CHA, then a Sheraton Corporation vice president and hotel general manager. (O'Neil now is president of the 2,500-room Caesars Palace in Las Vegas, Nevada.)

Moving to Days Inns

In the early 1980s, after Hanley left Sheraton, Days Inns of America, Inc., approached him with a job offer. Hanley wasn't interested, but recommended Russell, who was still with Sheraton. That recommendation went to an executive recruiter, who in the summer of 1983 asked Russell if he was interested in a marketing and sales position for a medium-sized regional hotel company that wanted to go national.

"Days Inns of America, Inc., was the first budget luxury motel company," says Russell. "On a trip from Atlanta to Orlando, Cecil B. and Marian Day discovered the lack of affordable lodging with a pool and a gift shop. They opened a 60-room motel in Savannah Beach, Georgia, and by 1983 there were 200 Days Inns -- mostly company owned and managed, with a few franchises in Alabama, Florida, Georgia, the Carolinas, and Virginia."

Cecil B. Day, chairman of the Cecil B. Day Companies, founded Days Inns in 1970. His assistant (and later partner), and the company's second-largest shareholder, was Richard C. Kessler, now chief executive officer of Kessler Enterprises and Grand Theme Hotels in Orlando, Florida.

"From 1970 to 1972 I managed all of Cecil B. Day's development and construction companies," Kessler says. "I moved to Orlando and founded Day Realty of Orlando to build Days Inns and apartments, and Day Realty of Richmond to develop and lease individual Days Inn motels and restaurants to corporate Days Inns of America Inc. I also bought out Day's partners in two Georgia subsidiaries, Day Realty of Albany and Day Realty of Savannah.

"In 1975, the Atlanta people Cecil had running Days Inns got into trouble and he asked me to come back to Atlanta as president and chief executive officer to take over and run everything. Cecil promised to make me chairman after 18 months. On that basis, at the age of 29, I returned to Atlanta in May of 1975. About a year after I returned, Cecil contracted cancer. He died about 10 months later. Cecil was chairman of the executive committee and I was chairman of the Cecil B. Day Companies. Marian Day assumed his position. I continued to run Days Inns of America and all of the other companies."

In September of 1983, Ms. Day and Kessler hired Russell as Days Inns' vice president of marketing, in charge of all national and overseas marketing, sales, and reservations programs. "He is a great salesman," Kessler says. "He always has new ideas."

Enter Henry Silverman

In September of 1984, Days Inns and the other Days companies were sold to Henry R. Silverman, then a partner in the Blackstone Group. "I've worked with him off and on ever since," says Russell.

Silverman wanted to grow the company faster than Mrs. Day did, by franchising rather than the organic method of buying real estate and managing hotels. From 1984 to 1988, Days Inns grew from about 285 hotels to over 800 nationwide. Today, the Days Inn brand is displayed in more than 18,000 hotels in the United States and 14 other countries.

"Following the Blackstone Group's purchase of Days Inns, many employees left. Fortunately they kept me on in marketing and sales," Russell says.

In 1985, Mike A. Leven became Days Inns' president and chief operating officer. (He is now president and chief executive officer of U.S. Franchise Systems, Inc., in Atlanta, Georgia, franchiser of more than 1,000 Microtel Inns & Suites, Hawthorn Suites, and Best Inns & Suites built or under construction.) Leven asked Russell to be Days Inns' vice president for operations. "It is unusual for senior-level managers to move from marketing and sales to operations positions," Russell says. "I was very fortunate to be offered an opportunity most people never have."

Family Matters

John J. Russell Jr. is the oldest of three children. His siblings are:

Paula L. Ross, 48, of Middletown, Delaware, a part-time payroll clerk for a local utility. She is married to Stephen W. Ross, an engineer at the Newark Daimler-Chrysler plant. They have two daughters: Kristen J., 24, an elementary special-education teacher in Reston, Virginia; and Stephanie, 20, a hospitality-management student at Delaware Technical and Community College in Dover. "Johnny has influenced my daughter's studies," says Paula.

Dean E. Russell, 47, of Beesley, New Jersey, retired from the Army Infantry as a lieutenant colonel. He is a past president of the San Francisco Art Institute, a subsidiary of Educational Management Corporation (EDMC), which owns and manages 17 private undergraduate institutions. He recently moved back to the northeast and is associated with EDMC's corporate office in Pittsburgh, Pennsylvania. Dean and his wife, Eleanor K. "Candi," a folk artist, have two children: Dean W. Russell, 11; and Ashley L., 13.

Robin M. Russell, 43, of Pike Creek Valley, Delaware. She is divorced, and works as a corporate secretary at Delaware Technical and Community College in Dover. "When I was a child," she says, "Johnny always seemed a lot older than me, but no matter how busy he was, he always found time to play with me. Our mother beams today when she talks about Johnny."

John J. Russell Jr.'s children are:

John J. "Jess" Russell III, 27, of Dover, New Jersey. He is a 1995 mechanical-engineering graduate of the University of Delaware in Newark. "I'm one of the desktop-support technicians sent to solve Cendant employees' computer problems," he says. "A user calls the Help Desk, and I go to solve the problem."

Elizabeth S. Russell, 20. She will transfer in September to the University of Georgia in Athens as a junior, majoring in psychology with possible minors in education and drama.

Hotel and Timeshare Associations Seek Common Ground

One example of the growing interaction between the American Hotel & Motel Association and the American Resort Development Association is that Douglas Viehland, CAE, president of AH&MA's American Hotel Foundation, has become a member of ARDA's International Foundation. He has helped ARDA set up its endowment campaign, and provided guidance on other funding issues.

"ARDA recognizes that there are future opportunities to do joint research projects and that we can benefit from their experience with foundation structures," says Cynthia A. Huheey, president of ARDA. "In addition, we are exploring ways in which AH&MA's Educational Institute (EI) and the ARDA Education Institute (AEI) can work together. AEI already uses some of EI's materials, especially on-line programs. We are exploring favorable financial arrangements for ARDA members to have access to AH&MA's complete online program. Further, we have just begun to explore adapting and modifying some of their course materials for our use. When we develop our convention workshop programs, we are sharing our topics with AH&MA, and suggesting [timeshare-related] topics we think may be of interest to their members.

"ARDA also plans to work more diligently with state hotel associations. Sometimes they have been close allies, but other times they have been our greatest opponents."

William P. "Bill" Fisher, Ph.D., president and chief executive officer of AH&MA, says John J. Russell Jr., AH&MA chairman-elect and president and chief executive officer of Resort Condominiums International, already is involved in a strategic-planning process that is examining all aspects of the hotel industry and may be expected to broaden the hotel association's perspective.

"At AH&MA, we now are more inclusive about timesharing than in the old days," notes Fisher. "In the past, AH&MA took a very Puritanical approach that unless you were a full-service hotel, you were not a hotel. In the last two decades, travel and tourism has grown and changed, and major hotel chains now offer timesharing.

"There is no reason ARDA and AH&MA can't reciprocate on event prices and offer admission at member prices to members of both organizations."

Russell The Actor

If John J. Russell Jr. had not become a hospitality-industry executive, he might have gone into advertising or onto the stage.

Russell says he has had the urge to run his own advertising agency since 1975. "I like the creative aspects of promotions," he explains. He enjoys public speaking and appearing in print and television advertisements. "I think I may even be halfway good at it," he says. "I've also considered being a talk-show host or a movie or television actor."

"John has always been a terrific communicator who likes to poke fun at himself," says Paul R. O'Neil, CHA, president of Caesars Palace in Las Vegas, Nevada, who worked with Russell at Sheraton. "While at Sheraton, he came to a number of employee and industry meetings dressed up as different people to help him get across his point. Once he came to a meeting on hotel renovations with wigs and dresses to show everyone's job was important. His skits were always memorable and went over well."

"For Russell's first Sheraton marketing presentation for the SMERF Group (a social, military, ethical, religious, and fraternal organization), he appeared with his face painted white and brown, carrying a mortarboard [graduation hat] and wearing a golfing outfit," says William E. Weld, CHME, now vice president of international sales and service for Cendant Corporation's international hotel division. "People who left that meeting may not have remember what was said, but they remember John's message." "For a meeting intended to improve relations between meeting planners and hoteliers, John set up a boxing ring and he and one of the planners dressed in boxing shorts," recalls O'Neil. "In round one, they fought for 15 or 20 seconds over room rates and pricing. For four more rounds, they fought over other contentious issues. The skit concluded with the message that the two groups should work together."

William J. Hanley, Russell's longtime friend and Cendant's senior vice president and managing director of worldwide sales, recalls a Days Inn annual meeting at which Russell "dressed up like General Robert E. Lee to give a marketing-warfare presentation."

Ron E. Jackson, now president and chief operating officer of RCI of the Americas, met Russell about 10 years ago when Jackson owned Sunbelt Hotels, one of HFS's largest franchisees of Ramada Inns and Days Inns. "John wore a rocketman costume to the presentation that introduced HFS's new Power Up, a property-management system instituted throughout the HFS brands," Jackson recalls.

Rosalie E. Leposky is managing partner of Ampersand Communications, a news-features syndicate based in Miami, Florida.

(Next month: Russell forms his own company, works for other hospitality firms, returns to Days Inns, and helps Henry R. Silverman build a hospitality-franchise empire that buys RCI.)

Copyright 1999 Ampersand Communications
All Rights Reserved
Published in The Resort Trades, September 1999.

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