Robert A. Miller celebrates 20th Anniversary in Timesharing
By Rosalie E. Leposky
Robert A. Miller celebrates 20th Anniversary in Timesharing In 1977, Robert A. Miller was working for an oil company and restlessly planning to embark upon his own business venture -- as a chicken farmer. A colleague suggested he consider timesharing instead. "I told him it wouldn't work," Miller recounts.
Robert A. Miller
|Edwin H. McMullen Sr.|
The colleague, Edwin H. McMullen Sr., won over Miller to the promise of the then-nascent timeshare industry. Miller created the first business model encompassing all aspects of timeshare-resort development, sales, management, and operations. Together Miller and McMullen learned the business. They established American Resorts, Inc., in 1978; developed resorts on Hilton Head Island, South Carolina; sold their company to Marriott Corporation in 1984; and began to build the first successful portfolio of timeshare resorts bearing the name of a mainstream hospitality brand. (McMullen left the Marriott organization at the end of 1990.) In 1997, Miller became president of Marriott Leisure, a division of Marriott Lodging, which in turn is the largest operating division of the parent company now called Marriott International, Inc.
On January 17, 1998, the 14-member Marriott Lodging executive committee celebrated with Bob Miller his 20th anniversary in timesharing -- a milestone of which only a select group of people in this young industry can boast.
Modest and Patient
A gentle giant of a man, Miller stands six feet seven inches tall in his stocking feet. "When I first saw Bob, I thought, 'Boy, is he big!' says William R. Tiefel, president of Marriott Lodging. "His large size is complemented by his great intellect, conceptual ability, and creativity."
Miller is a modest, patient man who likes to laugh. He describes himself as "a graduate bean counter" and "a self-taught extrovert."
"Bob's capacity for work is greater than that of anyone else I have ever known," says B. Anthony "Tony" Isaac, a former Marriott director of new-business development who is now president of Summerfield Hotel Corporation in Wichita, Kansas. "He is system-oriented and pays close attention to details. In the days before daytime organizers, he used three-by-five-inch note cards to organize priorities."
Alphonse S. Lucarelli, a longtime friend and former managing partner of the Detroit office of Ernst & Young LLP, describes Miller as "one of the most creative financial people I have ever met, incredibly analytical and innovative."
"My feelings about Bob Miller are more than professional. He is a loyal friend," says Craig M. Nash, president, chief executive officer, and chairman of Interval International. "Bob is one of the brightest people in the vacation-ownership industry, and a man of great personal integrity who will back up anything he says. He's a tough businessman in negotiations, where his goal is to work a fair deal for his company. He has good insights on the issues in our evolving, consolidating industry, and he definitely helps Marriott and its strategic partners to identify opportunities, issues, and challenges."
Growing Up In Florida
Miller was born in Chicago, Illinois, on November 26, 1945. When he was six months old, he moved to Palm Beach County, Florida, with his parents and older brother. Miller's father, Jerome D. Miller, sold Sears appliances until he retired at age 63, and died of Alzheimer's disease in 1990. Miller's mother, Leah, is now 91 and lives near her eldest son in Virginia Beach, Virginia. "Mother is in fantastic health," Miller says. "She lifts weights, rides a stationary bike, enjoys oil and water-color painting, surfs the Web, and sends e-mail to her grandchildren."
Miller's older brother, Richard H. Miller, M.D., 55, is a retired radiologist. He now spends his time fishing, playing golf, and riding his motorcycle. Miller graduated from Lake Worth High School in 1963, earned an Associate in Arts degree from Palm Beach Community College in 1965, and graduated from the University of Florida in Gainesville in August of 1967 with a Bachelor of Science degree in business administration and a Bachelor of Arts degree in accounting.
Setting The Curve
Miller and his wife, the former Diana M. Hall, attended the same high school but did not know each other there. "Our high-school graduating class had 300 students, and we did not know all of our classmates," she explains. They met at the Lake Worth campus of Palm Beach Community College, where Bob set the curve in a statistics class. "I had an almost perfect score -- my only claim to fame," he recalls. "That upset Diana and the rest of the class because my score drove down everyone else's grade. Diana was so mad she spoke to me about it."
Bob and Diana started dating in the summer after their junior year at UF, and were married after graduation, in December of 1967.
While attending UF, Bob joined Alpha Kappa Psi, the oldest national business fraternity, and two business honoraries -- Beta Alpha Psi, a national scholastic and professional-accounting fraternity, and Beta Gamma Sigma, a national business scholastic honorary society. "I was broke, but Diana wanted me to join the honoraries," he says. "We agreed that she would give me the money to join the honoraries, and I would give her my gold keys. They are still on her charm bracelet."
The Millers have three children:
"I'm five feet, three inches tall, and our children pat me on the head," says Diana. "We're a challenge for photographers."
"As far as the children are concerned, Diana is my genetic offset," Miller says.
The Millers had a variety of pets when their children were small, and now share their house with two talkative Siamese cats -- Mitzie, a 13-year-old seal-point, and Baron, a year-old lilac.
Diana teaches computer applications and desktop publishing at Lakeland Senior High School in Lakeland, Florida. The Millers live in a child-centered home where they raised their family. Now that they are empty nesters, Bob says, "We are considering building a new house with a wine cellar, a gym, and a larger home office."
"We're focused on our own world," says Diana. "Bob likes to work. Comfort is more important to us than having the biggest and most impressive house or car."
American Resorts and the original offices of Marriott Ownership Resorts, Inc., were about 10 minutes from the Miller home. When MORI moved to Orlando several years ago to be near its resorts, the Millers remained in Lakeland and Bob began commuting about 55 minutes each way. "After 26 years we have a lot of close Lakeland friends," Diana explains.
Leaning Toward Practicality
Miller was extremely restless during his senior year of college. He was anxious to graduate and help make business happen. "Though my classes were steeped in theory, I thought my biggest opportunities would involve using my common sense to make good business decisions," he says. "Much of what we learned was not real-world-based, and much of it I never used."
"I never understood how my professors could teach the same materials year after year. Where was the challenge? How did they avoid boredom? I've always thought academics should be people who late in their career come back to the classroom to give something back. I've thought about teaching, and think I would enjoy it, if I could make a difference. Perhaps I could teach a course using real-world economics and business to understand how business actually operates. But I do think that the new entrepreneurship-training programs in business schools are doing a good job."
When the Miller children were young, he learned that teaching people to think was a good exercise. "I worked with our children all the time," he recalls. "When we traveled, they frequently became upset with me. They would ask, 'When will we reach our destination?' and I would have them solve mathematical time and distance problems to figure it out."
Too Tall To Fight
After college, Miller tried to enlist in the U.S. Army's Officer Candidate School and was rejected. "I was classified 1-Y because I was an inch too tall," he says. "I saw friends go to Vietnam, and some did not come back."
He also applied to law school, and then realized that he was 21 years old and lacked the resources to attend law school. "I wanted to go back, but never did," he says.
Then he set his sights on working for one of the Big Eight accounting firms, and his first job out of college, from 1967 to 1972, was as a staff accountant with a Florida firm associated with Arthur Young & Company (now known as Ernst & Young). "In 1970 the firm formally became part of Arthur Young & Company following a change in Florida accounting law which allowed Big Eight firms to practice in Florida," he explains.
"Ernst & Young still does my personal accounting, and many of my former co-workers are lifetime friends. An Arthur Young client and close friend, the late Macasphalt Chairman Andrew Patrick "Pat" Bolton, inspired me to perform to the maximum of my abilities, and taught me some of the basic philosophy of life and business."
The Millers lived on Merritt Island in central Florida until 1972, then moved to Lakeland, where Bob became chief financial officer for Fleetwing Corporation, a regional retail and wholesale petroleum company. Fleetwing distributed commercial-quality petroleum products to municipal power plants, the phosphate industry, and other industrial companies. It also sold automotive-grade products to Firestone Stores, and home-heating oil to residents.
"Fleetwing was an Arthur Young client," says Miller. "I was familiar with its industry. I joined Fleetwing in March of 1972, and that September the world energy crisis began, creating an absolute nightmare. The nations in the Organization of Petroleum Exporting Countries closed the Straits of Hormuz connecting the Persian Gulf with the Gulf of Oman."
Surviving the oil crisis gave Miller the confidence to try something for himself. In 1978 he left Fleetwing to join American Resorts, Inc., which Edwin H. McMullen Sr. had established a few months before.
The Odd Couple
During their partnership, Miller and McMullen were characterized widely as the timeshare industry's "odd couple" -- the former tall, restrained, organized, and systematic; the latter short, effervescent, intuitive, and visionary.
"I thought highly of Ed McMullen, but I don't know how successful they would have been without the financial strength and structure Bob Miller brought to the partnership," Lucarelli muses. "Bob was incredibly innovative in all of their banking relationships. He excelled at creative ways to structure deals with banks to maximize return on investments. He wears his success well and has never changed."
McMullen is about nine years older than Miller, and was a Florida Southern College social fraternity brother of Miller's boss, Fleetwing President Walter A. "Wally" Smith. "Ed would come by to have lunch with Wally, and sometimes I would go along," Miller says. "Soon Ed and I were having lunch together and I became Ed's gratuitous business consultant. Ed followed the theory, "Take a consultant to lunch, and for the price of lunch you can obtain free advice." So far as I know, he still does this.
"I told Ed that I was considering leaving Fleetwing, and he said he was considering leaving the insurance business. We started talking about what we wanted to do."
The Chicken Plan
At that point, Miller was considering the chicken trade. "Chicken farming is a highly leveraged business," he says, "involving the use of investment tax credits and breeding-stock depreciation to build chicken farms. I would have found the available land, and hired farmers to build and run the actual chicken farms. Problems associated with chickens include cholera that can wipe out an entire flock. I figured I would need ten chicken-farm locations, a negotiated egg contract with a major grocery company, and an egg-grading plant.
"In the middle of my chicken research, Ed came by and talked about timesharing. I told him timesharing wouldn't work. He told me that I did not have enough information and urged me to think about it again. Then Ed and I went to Sanibel Island on the Gulf Coast of Florida and talked to Keith Trowbridge at Captran Resorts. Diana went with us. We spent the night at Lighthouse Beach Club -- a big mistake. Diana fell in love with Sanibel."
"I did not want to be a chicken farmer," Diana declares.
"Ed got to Diana," Bob Miller concedes. "I decided to take another look at timesharing, which I thought might work if we could figure out how to execute all the components of the business. I was the first to develop a comprehensive timeshare business model. Timesharing is a very complicated start-up business with one company taking on the role of banker, builder, developer, hotel operator, and marketer. I told Ed that I did not think one start-up company could do all these things. Best I could tell at the time, none of the timeshare businesses had developed the complete package, and I wasn't sure we could. Timesharing would probably just get us in a lot of trouble."
Learning The Business
For the next few months, Miller and McMullen learned to market and sell timesharing the hard way, by selling timeshares off-site and door-to-door for Robert Taylor at The Mariner Group, Inc., in Fort Myers, Florida. "As a retreaded bean counter masquerading as a salesman, I learned a lot about rejection," Miller says.
To find the appropriate location for their timeshare enterprise, Miller used his mathematical background to study length-of-stay data, travel patterns, and vacation amenities. "We identified 38 locations, mostly in coastal communities, including Atlantic City, New Jersey; Daytona Beach, Florida; Hilton Head Island, South Carolina; Myrtle Beach, North Carolina; and southern Florida. Land, zoning, and transportation were available in each of these communities.
"Hilton Head topped my list. Its length of stay was high, transportation was available, community infrastructure (electricity, sewer, and water) was in place, the ability to out-source housekeeping was available, and community amenities -- beaches, fishing, fine dining, golf, and shopping -- were present. I had never heard of Hilton Head, and was shocked when it came out on top. I had to take out a map to find it."
Research in the Field
Then Miller and McMullen drove seven hours from Lakeland to Hilton Head. "We left the interstate for back-country roads with dilapidated houses, and cows and horses grazing on the side of the road, and we were choked by the fumes from the Savannah paper factories. Twenty miles from civilization I began to wonder what kind of mess we'd gotten ourselves into. This did not look like tourist territory to me. Then we drove over a drawbridge onto the then-undeveloped north end of Hilton Head Island.
"It wasn't until we reached the gates of Sea Pines Plantation that we saw something worthy of development. Then we met Charles E. Fraser, the founder and developer of Sea Pines Plantation."
In 1956 Fraser started developing 5,500 acres of beach and pine forest, including 2,000 acres of parks and open space. Having sold his last interest in Sea Pines in 1983, Fraser now is research and development director for St. Joe Corporation.
"After searching the whole coast, Bob and Ed were looking for a site to build an American Resort," says Fraser. "They felt Sea Pines was the place to start their business. They were honorable men and brought a new level of integrity to timesharing, and I never had any regret for helping them to be pioneers.
"They hired an excellent landscape architect to fit their buildings into the forest. They established a timeshare program that offered a high level of maintenance and service for customers and owners. Later I helped convince Marriott to make their program the basis of Marriott's timeshare program. I talked to Fredrick V. Malek, a Sea Pines oceanfront owner who was then the head of Marriott Hotels." Today Malek is a partner in the Washington, D.C., company Thayer Capital Partners.
"Charles was skeptical at first," Miller recalls, "but Ed was a superior salesman. He convinced Charles Fraser that timesharing might work. We needed his permission because he controlled the land use in the plantation through the zoning and permitting process. Earlier a Sea Pines executive had sold a few condominiums as timeshare units."
Miller and McMullen fell in love with Hilton Head, and set to work. First they built six units as individual pre-fab homes. Their second project was Spicebush, a 24-unit resort on a 2.4-acre site, followed by Swallowtail, with 37 units on four acres, and then Monarch, with 122 units on 5.7 acres.
"We wanted to build upscale timesharing," Miller says. "The land we used for Monarch was very expensive for its time - over $ 1 million per acre."
McMullen found award-winning landscape architect Robert Marvin, of Waterburgh, South Carolina. His Monarch design won a national nursery award for the best-landscaped condominium of more than 100 units - an award presented by Nancy Reagan in the White House Rose Garden.
"Ed and I liked to practice management by walking around," Miller says. "One Saturday we went to the Monarch penthouse and found a carpenter sitting on some cabinetry with his baseball cap on backwards, chewing tobacco. He did not know who we were. We asked him how things were going. He responded, "I have no idea who is building this place, but they have more money than brains." I looked at Ed, and said, "I hope this guy isn't clairvoyant, or we're in trouble."
"Diana and I still own units in each of our early projects. I call them my nostalgia collection. We use them occasionally, but often we give them away. The market would only support one penthouse, and we sold every week in it. I should have bought one."
Marriott International, Inc.
In 1983, Marriott sent Isaac, its new-business development director, to the spring meeting of the American Land Development Association. "Tony interviewed us about timesharing," says Miller. "Marriott decided timesharing was worth further investigation. In April of 1984, Marriott bought American Resorts, and the rest is history."
"Timesharing was a growing business," says Isaac. "When I initiated the research, we had resort hotels with empty off-season rooms.
We wanted to figure out how we could package these rooms, so we started studying timesharing. We learned that people did not want off-season rooms. They wanted a condominium-like product that would match Marriott's name and reputation."
Selling to Marriott allowed Miller and McMullen to realize their dream. "We could expand our product venue with a company that had strengths we did not have in the hospitality industry," Miller says. "Marriott is known for its strong brand presence, operational excellence, and property management." Although Westin and Hyatt had explored timesharing earlier, Marriott was the first major brand-name hospitality company to make a substantial and on-going commitment to timesharing. As a result, Miller says, "Marriott has defined the quality of timesharing. People now use Marriott's timeshare product as a benchmark for product standards. That may sound self-serving, but it is true."
Miller found significant differences between running his own company and being a part of a massive hospitality company. "In a small company," he says, "every aspect has to be invented or leveraged through outsourcing. A large hospitality company has resources that can be applied to reduce the barriers to expansion, including business applications and hospitality standards for cleaning, food-handling, front-desk operation, operation manuals, and property management. Marriott has a large pool of trained, experienced hospitality staff who can be brought into our timeshare program."
A Great Salesman
Today the Marriott timeshare enterprise, which does business as Marriott Vacation Club International, consists of over 100,000 vacation-owners at 37 resorts in 18 vacation destinations in the U.S., the Caribbean, and Europe, but in 1997 Miller left MVCI to become president of Marriott Leisure. In this new position, he remains in touch with the timeshare business while assuming responsibility for strategic planning and development of new Marriott leisure products.
"At Marriott Lodging's executive-board meetings, Bob is known as a great salesman," says Tiefel, Marriott Lodging's president. "If you sit next to Bob, chances are good you will buy a timeshare. It's just a matter of time before everyone on the executive board owns timesharing."
Fishing and Golf
To relax, Miller likes to fish and play golf with his wife. Both have golf handicaps in the mid 20s. Miller enjoys golf and carries his clubs in his car trunk "My custom-made clubs are about two and a half inches longer than average," he says. "The day I get serious about my golf I will quit.
"I like to fish for trout and redfish in the Banana River in central Florida. Without pre-planning, I can escape life's pressures for two or three hours without having to be gone all day. Diana loves to fish. When I'm ready to go, she's out the door before me."
Diana learned to fish from her maternal grandfather, Robert Skanes. "He used to pick me up at 5 A.M. to go fishing," she says.
Miller taught himself to fish at age six. "I used the profits from my newspaper route to purchase my first fishing pole," he says. The Millers keep a 21-foot Grady White boat at their beachfront condominium for inland fishing, and occasionally charter a boat for ocean fishing. Several years ago they attended a week-long marlin-fishing school in Cape Hatteras, North Carolina, run by North Carolina State University at Raleigh. "We learned how to perfect our fishing skills," says Miller. "Brian, our youngest son, also likes to fish and goes whenever he can."
Last year the Millers fished for salmon in Alaska. "Some day I'd like to make a major time commitment to visit and fish in Australia, New Zealand, and Tasmania -- especially for the 30-to- 40-pound brown trout in Tasmania's lakes," he says.
Miller likes to read fishing magazines (including Boating Magazine, Florida Sportsman, and Salt Water Fisherman), and National Geographic. "I'm not a great fan of fiction," he says. "I would rather read about experiences, places and people."
The Millers like to travel. "I particularly like Scotland for the friendly people, the scenery, the blustery weather, and the food," he says.
Two Quotes summarize Miller's Philosophy
Two quotations hang on Robert A. Miller's office wall:
We will either find a way or make one -- Quote attributed to Hannibal 247-183 BC.
Winning is not a sometime fling
It is an all-time thing
You don't win once
In a while
You don't do things right once
In a while,
you do them right all the time
There is no second place
There is only one place
and that's first place.
NFL football coach Vincent T. Lombardi 1913-1970
About these quotations, Miller says: "They are indicative of a mind-set. My philosophy of life is that if you work hard and have a clear focus, you have the greatest chance of success. Most problems, when well-defined, have a solution. Trying to understand a situation and form a plan to accomplish objectives seems to work for me.
"Ed McMullen calls me a person who makes a plan and works a plan. That's not a bad philosophy, but sometimes you have to find a way when there seems to be no obvious solution, while maintaining confidence that you will find a way. Most solutions are not obvious. I have to take the time to figure them out. I'm not that smart. I just work hard until I find the solutions."
Miller explains Marriott's participation in Interval International's New Ownership
The seeds of Marriott's participation in the new ownership structure of Interval International were sown almost a decade ago, in 1990, when Marriott Ownership Resorts, Inc., switched its timeshare affiliation from Resort Condominiums International to Interval International.
"When we affiliated with Interval International," explains Robert A. Miller, who was MORI's executive vice president and general manager at the time, "Interval was a smaller, less well-organized company that was owned by attorney James Edmonds and his partners in London. For us to place our business with Interval, we had to have right of first refusal to purchase Interval if it was to be sold. We knew Edmonds had no desire to be a long-time player and would position the company for sale, and we wanted a strong parent company moving forward to protect our interests and those of other developers.
"In 1992, CUC International Inc. asked for our approval of its plan to purchase Interval International. We signed off on the CUC purchase while retaining the right of first refusal to purchase Interval at a later date. We could have purchased Interval International then, but we did not think it was in the best interest of our company or the timeshare industry for us to be the sole owner of Interval International."
"In 1997, CUC found itself in the position of having to divest Interval International. We were for a second time in a position to influence Interval's new ownership. We knew Interval was going to be without a parent that had a significant position in the hospitality industry, and we wanted a strong Interval to serve as a platform for all developers, large and small. The vast majority of Interval International's network of developers are independent entrepreneurs.
"Willis Stein & Partners L.P., a Chicago-based investment partnership, owns the controlling interest in Interval International. Marriott has taken a minority interest in Interval so it could be a developers' voice. Willis Stein and Interval's management invited two other hospitality companies to join us, Hyatt Corporation and Carlson Companies. Both will be helpful in supporting and guiding Interval International. Hyatt and Marriott International Inc. are partners in Pegasus, a cooperative hotel-reservation system, and Carlson is one of Marriott's strategic partners in the travel business. Carlson is a leisure-travel company that operates the Radisson hotel brand, and its Wagonlit Travel has a strong presence in Europe."
"We have a contractual agreement not to be in any way in conflict with any development in terms of predatory practices," says Miller. "Hyatt and Marriott have never shown any evidence of predatory practices against any developer." Marriott has held a leadership role in ARDA, and is an over-all industry advocate.
In the aggregate, Carlson, Hyatt and Marriott own less than 50 percent of Interval International. "We will never own a majority," says Miller. "If Willis Stein sells its controlling interest, someone new would hold the controlling interest.
"In any case, we want what is best for Interval international and we have created the strongest possible vehicle to achieve it. Marriott neither controls nor has access to Interval's internal customer lists. We therefore cannot use any of Interval's memberships information for our own use -- and the same is true for Hyatt and Carlson.
"If we have products and services to sell that are not in conflict with Interval's developer clients, then Interval may sell those products.
"Our goal is to serve our customers, to enhance the value of Interval International, and not to use confidential developer information to compete in any way."
Rosalie E. Leposky is managing partner of Ampersand Communications, a news-features syndicate based in Miami, Florida..
For More Information
Marriott hotels, resorts, and inns worldwide - http://www.marriott.com
Marriott International, Inc. - http://www.marriott.com/corporateinfo/default.asp?EPCEC=InProcess&EPNAVCEC=InProcess
Marriott Vacation Club International - http://www.vacationclub.com
© Copyright 1998 Ampersand Communications
All Rights Reserved
Published in The Resort Trades, February 1998.