Is Your Revenue Management up to Scratch? - Melissa Kalan! the easy way to increase bookings

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The ultimate goal for every property and hotel manager is to attain optimal profitability consistently. In the accommodation sector, the objective is to maximize both the number of bookings and the revenue per booking for properties and hotels alike. This involves striking a delicate balance between supply and demand, allowing you to set competitive prices without sacrificing business to rival establishments. Failure to effectively manage this balance can result in vacant properties or hotel rooms, or underpriced rentals, ultimately leading to lost revenue.

To ensure consistent bookings and maximize earnings from each stay, property and hotel managers must employ dynamic pricing strategies for short-term rentals and hotel rooms that account for variable demand. Additionally, adjusting booking restrictions throughout the year can further enhance booking prospects and revenue generation. By adopting these strategic approaches, property and hotel managers can foster a more profitable and sustainable business model in the ever-evolving accommodation landscape.

In this episode, we bring in a key operator and influential thinker from the sector, Melissa Kalan, founder of Australian Revenue Management Association (ARMA). Melissa and I discuss various key aspects of revenue and yield management in the hospitality industry. We dive into the importance of forecasting, the power of online reviews, emerging trends and the need for education and understanding of revenue management in this space. We also explore the impact of changing customer demographics and the role of technology in driving revenue growth.

Melissa also shares with us insights on the upcoming “Unstoppable” conference that brings together thousands of professionals from the industry to discuss the latest trends in technology and revenue management.

Thinking of going? Not only will you learn about revenue management, but you can meet me, in the flesh as I will be presenting! Keep reading for an EXCLUSIVE Accommodation Show Discount!

Topics covered in this episode:

What are the best tools to use for revenue management? 💰

What are some innovative revenue management strategies? 💡

What emerging trends will impact the industry most, and how can you prepare for them? 🚀

How has the increased use of OTAs impacted revenue management? 🌐

How do you measure the ROI of your technology solutions for revenue management? 🤔

What are the most important revenue management metrics? 📊

Australian Revenue Management Association (ARMA)  Founder Melissa Kalan has a life philosophy centered on the principle of “always learning”, and with this, she empowers organizations to lead a revenue management culture from the top down that influences both profits and staff retention.🌟

Having successfully founded ARMA – Australian Revenue Management Association and the APAC Revenue Management Summit, Melissa makes the specialized but critical commercial discipline of revenue management achievable for all accommodation operators by providing quality and accessible education pathways and education support tools for academia.

Her background includes revenue management positions within Qantas Airlines and The Ritz-Carlton, Hotel Company and she has consulted on a broad range of revenue strategy projects for a diverse portfolio of tourism operators. She was recently appointed as an Honorary Adjunct Associate Professor by Taylors University the #1 Private University in Malaysia and SEA in recognition of her contribution to education in the field of revenue and yield management.

And for your discount!

1. Go to this link

2. Select a 2-day delegate ticket

3. Apply the code BART23 on checkout for 10% off the retail price.

(note – we do not receive any commission, this is purely to give you the opportunity to attend at a better price)

Thank you for tuning in to this episode on revenue management in the hospitality industry. Be sure to tune in next time for more in-depth discussions on the topics that matter most to you.

Thanks for listening!🙌

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🎙 Listen to the episodes here


Bart: Okay, everybody, welcome back to another episode of The Accommodation Show. This week. I’m joined by the wonderful fantastic Melissa Kalan to the show. Welcome.

Melissa: Thank you, Bart. Nice to be here. Thanks for having me.

Bart: We’ve been trying to set up this interview for a little while and I’ve been super excited about it because we will be talking about all things revenue management, and I would call you the revenue management queen because you are the leader of ARMA which is the Australia Revenue Management Association. You’re putting on an unbelievable conference called Unstoppable which you’ve been doing for a little while. You’re some of them I met at no vacancy, which was an event A little while ago, and you just have a great depth of knowledge about our industry, but also about revenue management. So I’m excited. I’m really excited to get stuck into talking about revenue management. But before we get going, I love you. I’ve read your bio, but I think you might be able to sort of give people a bit of an introduction as to who you are, and what you do with ARMA, but also a little bit of your history and how you got to where you are.

Melissa: Perfect and I’d be happy to thank you for that intro as well. So look, I lead the Australian Revenue Management Association. I’m one of the company directors. I founded the company about 11 years ago now and really it was set up to champion the discipline of revenue management because I just know how valuable it is to business and the actual Association really is a professional association that has a core focus on upskilling the industry and we have professional certifications. We run events like the summit, which you mentioned and provide networking opportunities and resources for the industry. So I that came about because my original background was in the hotel industry. I started off in a hospitality traineeship and worked for the Ritz Carlton Hotel Group, and I was at the right place, right time and was introduced to this discipline of revenue management. And fell in love with that it was like a light bulb moment where I just couldn’t believe the way we were sort of approaching business and managing our inventory prior to having this knowledge and I just found my niche in my space and have stayed in that ever since. 

I went and spent some time at Qantas to broaden my skills. And you know, the idea was for me to always come back in a role where I could help educate and upskill the broader industry that really, at the time didn’t have access to any education in this space. Some did the five-star sort of brands, and large chains did have a lot of support from their American corporate offices, a lot of them but the broader industry really didn’t. And the goal was to provide e-learning and professional certifications. online as well so we could reach the broader industry much quicker. And that’s how that came about. And 11 years later, here we are. We’ve done eight summits as well. It’s eight here, and it’s always really well-received by the industry. And look, it’s a great industry and it’s forever changing and I just constantly have to keep abreast of you know, the trends and technological changes and everything that’s happening in that space.

Bart: What a fantastic segue. It’s a hard topic for today. So today we’re gonna be talking about trends and technology and I guess, you know, going to an event like unstoppable This is where you get to sort of share and learn. I’m sure that you yourself, you go to these events, you organize events, to get the latest information from people that are out there on the coalface actually dealing with these different issues and understanding revenue management particularly because there’s so much turbulence out there and it feels like it’s always turbulent, right so it’d be a COVID be it inflation be wars there’s always these things going and therefore this skill set around revenue management is more important than ever.

Melissa: Yes, well, we did. You know, we have lost quite a lot of talent that succession pipeline of people in the industry sadly as the impact of the last few years, but I mean, the discipline itself and the skills it’s always been of value, but certainly when people are impacted with the revenue losses have impacted financially. Sadly, as many operators have been through the pandemic years, there has been a renewed or I suppose a shift in focus of, you know recouping those losses and making monies is at the forefront and making money always has been but once you actually hit financially, and you see the losses that can occur, and then there’s that real extra need and desire to make more out of what you’ve got to find move the needle, I suppose if you want to use that term as much as you can to every single dollar counts. And that’s where I think is big shift has turned more on to the discipline of revenue and yield management as well as upskilling their people and investing in them to make sure that they are at the forefront of it. 

Bart: I guess that’s a fascinating one because you’ve got tenure in this space and you’ve been doing these conferences for quite a while and you’ll see how things actually changing and how organizations are bringing in, you know, I guess basic revenue management principles, but there’s also I would say revenue management philosophy as well. And that’s from having different guests on the podcast, who have completely different points of view as to how one should manage one’s revenue and you know, not race to the bottom and that sort of thing. The first question I would have is in terms of where things were 10 years ago, and where they are now in terms of skill set because there are some people that have within their organizations those a year we’ve got revenue management under control, and some would say, Yeah, we know about it, but not doing well enough. Do you have a gut feeling as to sort of one How was changed and now how good organizations are in their revenue management?

Melissa: It’s really come a long way over the last 10 years, and you know, that’s been really pleasing to see a lot of the people that the value of the discipline has really increased in terms of their worth to the organization and their standing in the organization. So we’ve seen a lot of skilled revenue managers, you know, from being perceived, as you know, just data analysts and pouring over data to really being part of the broader commercial leadership teams now in organizations and also taking the lead of the commercial teams, which is really, you know, a great step and also moving into general manager and more senior corporate level roles in companies. And I think the value of especially when there are good communicators and good leaders, the value of what insights they can derive from the data. And sometimes it just takes a small tweak to get some great top-line revenue uplift. So I think they’ve really earned their seat at the table. Now we are set to rise conditional metres that have come from the revenue management side and business as opposed to the operations as a whole is that people who don’t have a good grasp of the numbers can do very well within an organization in terms of overall leadership and strategic thinking. Because you’re thinking outside the box, rather than seeing what you can see right in front of you. You’ve got a much bigger piece of the puzzle that you’re actually looking at.

Melissa: Correct. And I think where are the skill set of revenue managers and good ones is the context that they bring to the data. So it’s you know, there’s a lot of data that people can have access to, and that can be a good thing. It can be a bad thing at times, because but a good revenue manager, the skill set they have is being able to know when to react and when not to react and adding the layers of context required before just quickly reacting to a decision of one, one data set or one number. Context is very important.

Bart: I definitely want to move into sort of trends of technology and that sort of thing and talk about a conference but before we go there I do want to address so one of the biggest emerging sectors within the accommodation industry is short-term rentals, vacation rentals. All the OTAs are speaking about that that’s where they see their biggest opportunity for growth and revenue management as well as a plethora of different tools that are being developed to help manage pricing, sort of dynamic pricing tools and that sort of technology that sits behind it. But there’s this there’s actually a real lack of education in terms of the sort of revenue management side like what kind of rules should I have and when should I apply it if it triggers? 

How do I use that data? And a lot of these tools will automate it for you but as you and I will well know that you do need you need to understand your business tools to understand what you’re dealing with, particularly with short-term rentals where it’s not like a hotel where we’ve got 100 rooms or 50 rooms or 1000 rooms. We’ve got disparate portfolios all over the place with different properties. You can imagine that, like I see short-term rentals is a truly emerging class, right? Like it’s been around forever. Not what not the way that it is right now. It’s changing really fast and professionalizing, you’ve got property managers, so you’ve got the property managers who will probably sit in there and have some grasp of revenue management, but I’d say that they’re probably back to where the hotel industry might have been in the past. Do you see the same way or differently?

Melisa: Yes, look, I mean, that would be my sort of broad, more generalized view, it was pretty much always perceived there were the airlines and the hotels, you know, came into place and now over the last 10 years, I’ve seen it really become at the forefront, say in the holiday park sector. And now I would say the short-term rental market is really starting to become more aware of the value that this discipline can bring. And I think the key is understanding all the elements and the moving parts that make up the discipline and different operators have to take and apply parts of it and tweak it to their own nuances within their own businesses. So apartments are a bit different to your traditional say hotel model and then holiday parks have their own different elements, I suppose that they have to tweak and you know, and apply things slightly differently. But underpinning it is it’s essentially the core the same as what we’re all trying to achieve. It’s just that it has to be tweaked depending on the different business models. And so I think there’s a lot of opportunity in the short-term rental market we’re certainly applying elements of this, certainly from that dynamic pricing piece as you’ve just mentioned. Once they understand it can shift away from the static pricing concept to understanding why and the value that dynamic pricing brings, and how to do that effectively, then they can really see some business growth.

Bart: And then, as we were saying, I mean that’s literally where, you know, revenue management. The history of it was, as I say, hey, let’s prove the value of actually having dynamic pricing. Let’s prove the valuable these things. Oh, hold on a second, we can actually improve our bottom line by half a percent quite simply by having some good strategy around it. Now I’m gonna move back to to the sort of trends and technology because I believe that Unstoppable wasn’t hosted last year, but correct me if I’m wrong. There’s been a bit of a gap and I’d love to get your thoughts on what we can expect to sort of learn nowadays. Where is the industry out where and I imagine that it’s kind of like pre-COVID Now to post COVID What are you seeing?

Melissa: Well, we did actually, we brought it back in person, this May last year, and we titled it then let’s get on with it because we want it to just start moving forward. And yeah. And then prior to that, we did run it to use virtual, so it was a bit of a rebuild again, although it was still well received by the industry. We did move it to Sydney and it was previously held in Melbourne and it will be in Sydney again this year. So this year, I think the great thing with this programme is that it is the whole two days and we can do a two-day programme because there’s always so much to talk about and learn about all the topics are targeted specifically to revenue management and all of the people there are people that are just they just absorb this information and they can’t get enough of it. So today’s capacitors conference and I’ve had people say, I wish it would go longer. So that’s always good feedback as well. But the topics resonate but this year I think it’s heavily dominated by not heavily dominated but there’s certainly the AI focus and the digital tools that are you know, there’s always emerging digital tools that are of use for business and becoming more efficient and with automation as well. So that’s kind of a bit of a flavour of this theme, but we always have, you know, the direct booking topics and also the industry pain points around rogue sites popping up that are sort of, you know, scraping their rates and selling their businesses without them sort of knowing about it and lots of different industry pain points like that, that resonate across all operators even in the short term rental market or the traditional accommodation space as well. And costs understanding distribution costs as well is a big one, as market share. And I think ownership like not only with the customer about trust as well, in terms of persuasive nudges and things and all that psychological element of pricing techniques. That is something that the industry has been a bit behind on as well and the OTA is very good at it. That’s a whole nother piece. That really can add a lot of value to your conversions and your business growth as well.

Bart: Yeah, they will be interesting as well to see how much chatter there is around sort of inflationary pressures as well.

Melissa: Is that absolutely yes? Sorry. That just probably be because I think we, we there are so many forces that we’ve obviously come through the pandemic and business is, you know, coming back at this stage, but I think we have to brace for more bumps along the way and some of those bumps are the pressures of inflation increased cost of living and how does that affect your segmentation and customer spend? Whilst it might maybe look good in the mid to short term, what’s it going to look longer term and that is a key piece over my years dealing with the industry is making sure that we always have you know as far out as possible on our radar as well because often if you’re looking at it often enough, that’s when you can start to see red flags. And the sooner you can see red flags and you know obviously the quicker you can react and make changes that are necessary.

Bart: Interesting. So if you talk about I mean just basic like sort of dynamic pricing. I remember having less Morgan on the show we were talking about what inflation must mean a year ago now and we’re talking about how he saw the need to have dynamic pricing within the restaurant. So as the cost of the tomato goes up, all of a sudden you got to change all your menus. You got to figure out what you’re doing and how you’re pricing things because it’s such a dramatic difference that things make untethered your cost base but also, you know, now you’re going to have issues with consumer demand as well which is going to change and people’s appetite for different offerings will change. I went out the other day and spent $19 for a pint of beer, you know, which in my view is completely unsustainable. So there are all these elements that are changing all the time and knowing how to adjust and how to pivot and how to be nimble right. Are we a nimble organization that can actually make these changes when we need to? I think that’s gonna be a super important discussion I’d like to hear a lot about and say, what are people actually doing? And how are you preparing for this? Like, I think that with COVID It was almost like, All right, we’re all shut down. We’ve got a clear path. Hey, nothing’s happening, right? Let’s figure it out. Know it’s on a month-on-month basis. You read the papers are pretty crappy, in my view that helped create it actually give me good information that you can. What do you reckon?

Melissa: I think it’s exciting to see the rebound in trouble that we’ve seen, but I think it’s naive to just think that, you know, great, we’re just going to keep on surging forward now, as things used to be there are still certainly a lot of external pressures on the demand that changes the sort of traditional way we used to pre-pandemic. We’ve seen that just with Day of Week changes, even in demand like rare Sunday used to be quite quiet and now that’s picked up a bit because people are trying to avoid, you know, delays with flight schedules and things like that for a Monday. So they’ll travel maybe earlier on a Sunday to get in whereas Friday, which used to be busy, isn’t as busy. This is general I mean, obviously in different pockets and different sectors and different segments, it can be a bit different. But if I touched on say the corporate segment, for example, and a lot of our city hotels rely heavily on that corporate demand and they’ve had that force change. There’s pressure on reducing carbon footprints and the sustainability piece, which can impact corporate travel and companies have gotten used to doing servicing their clients virtually. So I think you know, there definitely has to be a focus on not resting on your laurels as such, and yes, being excited that there is this rebound of travel but not just assuming that it’s just going to keep it’s not going to still have bumps along the way because there are things that are actually going to keep challenging it and you have to really be a question numbers and constantly looking at the data and like I said, as far out as you can as possible to try and pick up any red flags.

Bart: And I wonder as well, whether there’s going to be a need to relook at the data points who are actually collecting. You know, I think that you know, really understanding our customers and where they’re coming from and why they’re coming and how long they’re staying. And most things I think that there’s a lot of assumption that’s been put into the equation as to why people are travelling and I think that it’s going to dramatically change. I’ll give you an example. Working from home has obviously been a huge thing over the pandemic and a lot of people now do work from home but also now there’s been a pushback against that from organizations or CEOs saying hey, you know, you should probably come to work and do some work rather than, than not work when you’re when you’re supposed to be working at home and not my words, as what they’re saying. So that push to get back into the office is to ensure productivity, right? chores like Chat GPT, which I should be talking about, where there is the improved efficiency to such a level that now we should get more output from our employees by you know, 10 fold or 20 fold. So, therefore, you know, it’s not that you’re doing the job that you’re doing but for now doing a lot more. What I’m getting at is there’s just kind of cool to get people back into the office and things are changing once again, and we need to make sure that we’re getting those data points so we know why people actually travelling whether it’s still okay to do business just virtually aware that those expectations are coming back to Hey, hold on, we do need to meet face to face and shake each other’s hands, as opposed to how it used to be. So data point is kind of something that I think would be quite interesting to see what people are doing.

Melissa: That’s right because the whole remote piece and flexible or hybrid arrangement. It’s a bit like Pandora’s box that you know, once it sort of is the genies out of the bottle. Once it’s out it’s hard to sort of rein it back in once people know what’s possible. For example, you know, I just think back to my airline days, even at the time, they weren’t really even open to being in what could have been done remotely back then. Just wasn’t really something that was done on and off as a possibility. And then we’ve seen the airlines operating, you know, when even though the borders got shut, but where they could put flights on they were operating domestically the operation out of their homes. 

So like the whole airlines were being run out of people’s homes, so it can be done, and we’ve seen it get done. But certainly, there are a lot of challenges for businesses as well. And as you said, I mean, you’ve got to really be able to measure is about the productivity, but putting the right measures in place for that is possibly a challenge for some businesses, but also there’s that other flip side of you know the chat by the water cooler and the culture of the organization and, and I don’t have all the answers for it, but I just know that it is difficult. There are a lot of benefits and there are a lot of challenges with it as well. And he has a whole data piece around that we really have to be looked at to the productivity expectations.

I will mention just one thing on that though, is one downside so we had a you know sales manager one time that had quite an aggressive approach, but because they’re not in the office and you’re not picking up or seen or just observing that behaviour. Sometimes whilst the sales looked like they were coming in, it wasn’t until you know, the repeat business started dropping off or the sentiment that you got from customers and feedback. That’s how we sort of were able to identify and speak to close contacts and get feedback. But, you know, that wasn’t something that was so apparent initially because you weren’t able to observe the person’s behaviour in the office on a regular basis and hear client conversations and things like that. So that’s just a side piece and a challenge but there are benefits to it. But there are certainly a lot of difficulties for business leaders as well.

Bart: Yeah. So for me sort of applying that sort of thinking to revenue management, I really feel that our customer demographic is going to change. It really is and we need to keep it pay attention to it. And we need to think about what’s actually happening within our business and is it what we think it is because we like you said, we’ve kind of set this pattern now people are spending more and they’re doing this they’re travelling in this particular way. Once international travellers are back, it’s going to be x, y and Zed which I don’t think it’s going to be I think everyone that it used to travel it was quite a bit older different knees or families now I think it’s all going to be quite an interesting one for a lot of businesses to tackle to deal with.

Melissa: Yes, and I do think we all know reviews are really powerful, but I think there are real even more so reviews make up part of the whole revenue management piece because it influences the perception of a property which influences demand and it also influences pricing. So online review scores are a very powerful piece of the whole revenue and yield management. Just discipline but just I’ve noticed just doing a little look myself recently online that I find you know, value for money was something that was dipping down on some properties that I wouldn’t have expected it to me It is certainly in that five-star bracket as well. And I just think it’s really important for all operators no matter what star rating you are or what you know what level you are, then you have to look at the reviews because people’s expectations are changing as well. And yeah, just making sure that when they’re screaming out, they think you’re lacking value for money. I think you need to look at the pay attention.

Bart: Wow. Look, I feel that these are conversations that we could have for days and luckily we’ve got a couple of days coming up where we will be able to have these conversations with each other. And with that appears. Excuse me, tell me a little bit more about Unstoppable what’s happening what people can expect from that event.

Melissa: Great. So the unique thing about our conferences as I touched on before that it is two days and all of the topics are focused on strategies that can help drive business growth. We do. It’s very much an education conference for two days and the fact that everybody there is all like-minded professionals. The buzz of the summit is really exciting and it’s something that a lot of people talk about after the event because it’s just been in a room full of like-minded people. All you know lapping up that content is really nice to see. We try to actually mix the delegates up a lot so they don’t just sit in a sort of main ballroom-style room listening to you know, death by PowerPoint in the sleep for two days. We mixed them up into genius zone sessions which are small discussion hubs. 

So it gives them a chance to ask questions as well where they feel more comfortable doing that rather than in a main plenary style room. We also have some commercial workshops that will be focused on different a whole lot of different topics around their distribution around how to sell smarter is one of the topics safe for this conference. And this year we are focusing or we have an expert piece on ESG as well, because I think that that is something getting talked about and loosely touched on in some of the conferences but there’s still an underpinning was the word lack of our lack of lack of knowledge really, in terms of just the depth of what that needs to go to perhaps and what that means from a revenue generation perspective as well for business. So we’re talking about that as well and of course, AI and it’s something we all just have to embrace and learn about how we can really utilize that well in our businesses as well. And from a revenue management standpoint, we’ve always had automated revenue management solutions around which are fantastic for really if you want to do revenue management really seriously, there are some really great tools out there that automate and churn the data for you and bring in data from a lot of sources and do a lot of demand projections for you. But bringing in you know, machine learning and AI and all this, this element now is something that we’re all trying to embrace and get up to speed with this as quickly as possible.

Bart: It’s gonna be more and more important as the technology has gotten better and better at this sort of stuff as well. Awesome. So this is a two-day event, which is happening on May 23 and 24. So folks, if you want to check it out and make sure you look into the show notes and I believe that there may be a little bit of a special offer for those from the accommodation show as well. Is that right? 

Melissa: Yes, correct. 

Bart: Awesome. So check out that link and you will get yourself a bit of a special if you do want to attend but make sure that you get onto a quick because we do not guarantee that that offer will be going forever or for the whole up until the events that make sure you get on check out the terms and conditions and get yourself a ticket. Is there anything else that we need to cover off most or are we pretty good?

Melissa: I think we’re pretty good. There are lots and lots of things I could cover off. Still, I will just leave one tip in terms of IDC a written a lot now about the value of forecasting and it’s more important than ever. Still, I would just like to say that forecasting has always been important for business and it is something though that is lacking out in the broader industry. And I think you know, the skill set of good forecasters is still very, very valuable for business and you know, it underpins the whole commercial strategy and the cost management side and also the guest experience and satisfaction side as well. Once your forecast accuracy is really ticking along nicely and as accurate as it can be. So forecasting is a large part of revenue in your position, and then in order to be able to determine your pricing. It’ll all stems from that. So I just wanted to flag that I do see it’s more important now than ever about forecasting has always been important. And really people need to focus on it. 

Bart: There are just so many different I guess, from what I’m getting. There are so many different things that we can look at and focus on and taking that time out to actually meet is talk about these different issues even maybe explore issues that we made out of Florida for a little while, actually, no one is more important than I envisaged. It’s valuable.

Melissa: And that’s where the summit is great because it is once a year, an opportunity to bring the industry together from all sectors and just having that conversation like you mentioned you know, running an idea about some earning an ID pass someone or having that the diverse opinions about something. It’s all really important to have that have those discussions and that’s where the summit keeps that alive in the industry and thriving.

Bart: What I like about the events myself is getting to know people that are your peers that you could potentially call in the future and say, Hey, I’ve got this problem. I’ve got this issue. How would you deal with it? I think that’s incredibly valuable.

Melissa: Correct. 

Bart: All right, folks. I’m going to wrap it there. Thank you so much, Melissa. If you did enjoy the episode and make sure you give us a like a follow and a subscribe. Leave us a review on Google. We want to know whether you’ll be attending this event and whether you are doing revenue management in your business and how valuable you think it actually is. Melissa, thank you so much. Once again, I do sincerely appreciate you and I’m looking forward to presenting at the event in a few weeks’ time.

Melissa: Yes, thank you, Bob. Thanks for having me. Speak to your audience today. And yes, we can’t wait to have you in person this year at Unstoppable and have you share all your amazing insights with our audience as well. So thanks again. 

Bart: Have a good day.

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