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Managing Front Office Operations

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Competency 1

Objective: Explain how the travel and tourism industry can be categorized, and classify hotels in terms of their size and target markets.

Ellsworth M. Statler—the Henry Ford of the modern hotel—once said, "The guest is always right."

[Endnote #1.1] Some might counter this turn-of-the-century hotelier by saying, "Guests are not always right—but they are always guests. " Either way, these statements reflect the ultimate challenge hospitality professionals face: to provide service that meets the ever-changing needs and demands of guests.

For many, the hospitality industry holds a certain glamour and sophistication. This is partly due to the image most hotels choose, refine, and project to the public. Much of this image is created through

architecture and design. Yet a building is really only bricks, mortar, steel, glass, and furnishings. The property's architecture and style may be important in setting the theme, but other factors are also important in differentiating one hotel from another. These factors can include the property location, variety and quality of food service, special features and amenities, and, perhaps most important, a staff that puts all of this together with service to create the overall image and competitive position.

Front office personnel are literally on the front line in creating that image. Reservations agents are often the first to have contact with the guest, while front desk agents, concierges, bell attendants, and door attendants are among the first employees guests see upon arriving at a hotel. The variety of talents and skills needed to satisfy guest needs makes front office work interesting and rewarding. And since no two guests, two hotels, or two days are ever the same, front office work can't help being exciting and challenging.

This chapter outlines some basics about the hospitality industry, and describes how hotels can be classified by size, target markets, level of service, and ownership and affiliation. It also discusses the

reasons people travel. Finally, the chapter touches on some of the challenges the industry faces when accommodating the increasing number of guests from different cultures and nations, and discusses

influences on travelers to buy.

The Hospitality Industry

The hospitality industry is part of a larger enterprise known as the travel and tourism industry. The travel and tourism industry is a vast group of businesses with one common goal: providing necessary or desired products and services to travelers.

(Exhibit 1 Overiview of the Travel and Tourism Industry) - Sơ đồ này AD ko chèn lên web được, các bạn xem qua link:

Exhibit 1 divides the travel and tourism industry into five parts, and shows some of the components of each part. The hospitality industry consists of lodging and food and beverage operations, as well as

institutional food and beverage services, which do not cater to the traveling public. Lodging operations stand apart from other travel and tourism businesses, since they offer overnight accommodations to their guests. Many lodging properties provide food and beverage service, recreational activities, and more.

An organization that addresses travel and tourism issues in the United States—particularly those affecting the hospitality industry—is the American Hotel & Lodging Association (AH&LA). As the trade association of the American lodging industry, AH&LA is a federation of hotel and lodging associations located in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Canada and most other countries with many lodging establishments have similar national organizations. These national trade associations normally work together through the International Hotel and Restaurant Association (IHRA) for common purposes. IHRA is based in Paris, France.

A leading service of AH&LA is its Educational Institute. Since its founding in 1952, more than two million individuals have benefited from its programs and services—making it one of the largest hospitality

industry educational centers in the world. This non-profit organization provides essential educational and training resources for the expanding hospitality industry, and helps prepare dedicated individuals for 

careers and career advancement within the industry.

Classifying Hotels

With so many properties offering so many services in such a huge industry, it is easy to understand how people might get confused about the differences between hotels, motels, inns, and other lodging

establishments. The fact is that the distinctions are not always clear. The confusion is compounded because owners can classify their properties as they deem appropriate, making it even more apparent why

universally agreed-upon definitions are difficult to implement. Still, despite the numerous exceptions, some general property distinctions exist and are widely accepted.

A hotel or inn may be defined as an establishment whose primary business is providing lodging facilities for the general public, and that furnishes one or more of the following services: food and beverage service, room attendant (housekeeping) service, concierge, bell and door attendant service (sometimes called uniformed service), laundry or dry cleaning, and use of furniture and fixtures. Hotels have 50 to 2,000 rooms, and sometimes more; very large hotels may have more than 5,000 guestrooms. Inns usually average 5 to 50 rooms and provide a higher level of personalized service.

The term motel is a contraction of motor hotel. It is a lodging facility that caters primarily to guests traveling by automobile. Early motels often provided parking spaces near guestrooms, but that has

changed in recent years as motel owners and franchisors have become more aware of guest security.

Motels may be located in any setting, but are usually found in suburban or roadside areas. They became especially successful in the 1950s and 1960s with the development of the interstate highway system in the United States. Many motels are two-story or low-rise buildings located near major highways. Pool areas with shrubbery, trees, and children's playgrounds are familiar "trademarks" for many motels. In most cases, motels do not offer the full range of services and facilities available in a hotel.

Unless otherwise indicated, this chapter will use the term hotel as a general term for hotels, motels, inns, suite hotels, conference centers, resorts, and other lodging properties.

There are many ways to classify hotels. The categories discussed in this chapter are based on hotel size, target markets, levels of service, and ownership and affiliation. It is important to note, however, that some properties defy easy classification, and a particular property may fit into several categories.


Size—or the number of guestrooms in a property—provides a common way to categorize hotels. Hotels

are typically grouped in four size categories:

  • Under 150 rooms
  • 150 to 299 rooms
  • 300 to 600 rooms
  • More than 600 rooms

These categories enable hotels of similar size to compare operating procedures and statistical results.

Unless otherwise specified, hotels in the classifications discussed in the remainder of this chapter may be of any size.

Target Markets

Two of the most important marketing challenges a hospitality property encounters faces are: "Who stays at our property?" and "Who else can we attract?" Through marketing research, tools, and strategies, lodging properties seek to identify target markets. Target markets are distinctly defined groups of travelers that the hotel seeks to retain or attract as guests.

A popular trend in the hospitality industry is to define or identify smaller, distinct groups or "segments" within larger target markets, and to develop products and services aimed specifically at satisfying these segments. This process of market segmentation has contributed to substantial growth, particularly within hotel chains. For example, Marriott Hotels and Resorts now has many different brand names: J. W.

Marriott, Marriott Marquis, Marriott Hotels, Marriott Inns, Courtyard by Marriott, and Fairfield Inn by Marriott. Marriott also owns the Ritz-Carlton and Renaissance brands, and people can reserve rooms at

any of its locations through the same reservation system. Even Marriott's extended-stay segment has been divided into sub-markets, with Residence Inn by Marriott, TownePlace Suites by Marriott, and SpringHill Suites by Marriott. Each brand is directed toward a type of guest, or market segment, that Marriott identified as distinct. Many other major lodging companies have taken the same segmentation approach.

InterContinental Hotels Group, Starwood Hotels & Resorts Worldwide, and Hilton Hotels Corporation employ market segmentation through various products to attract more customers. The advantage to this

approach is that a variety of properties can be located in a particular geographical market, thereby attracting a variety of guests. The disadvantage is that guests may become confused when trying to

differentiate between the facilities and services of each brand within a chain.

Hotels target many markets and can be classified according to the markets they attempt to attract and serve. The most common types of properties based on target markets include commercial, airport, suite, extended-stay, residential, resort, lifestyle, bed-and-breakfast, vacation ownership/condominium, casino, conference center, and convention hotels. There are also several alternative types of lodging properties that directly compete with hotels; these are discussed at the end of this section.

Commercial Hotels. The first hotels and inns were usually located in the towns and villages they primarily served. It was not until the age of railroads that the hotel business began to expand in the United

States. Traveling by railroad was faster, easier, and safer than traveling by horse-drawn carriage or even by the first automobiles. Railroads connected the country, and railroad stations were generally located near the center of each town. Travelers getting off trains usually needed a place to stay. As more people traveled, the demand for hotels grew. In turn, more hotels were built, many conveniently located near railroad stations. The Waldorf-Astoria Hotel in New York City was constructed above a below-ground railroad platform, which it occasionally used as an entrance for important persons arriving by rail. (The original Waldorf-Astoria was on the site of what is now the Empire State Building.) In time, hotels located in the city center not only catered to travelers but also became the social centers of the community.

Like their historic counterparts, commercial hotels continue to be located in downtown or business districts, areas that are convenient and of interest to their target markets. Commercial hotels form the

largest group of hotel types. Although they primarily cater to business travelers, many tour groups, individual tourists, and small conference groups also find these hotels attractive. In the past, commercial

hotels were referred to as transient hotels because of the relatively short length of time guests stayed in them compared with other hotels.

Guest amenities at commercial hotels may include complimentary newspapers, in-room coffee makers, free local telephone calls, cable television, access to DVD players and videos, video games, personal

computers, high-speed Internet access, ergonomic desks and chairs, and fax machines. Car rental arrangements, airport pick-up services, 24-hour food service, semi-formal dining rooms, and cocktail

lounges are usually available. Most commercial hotels have conference rooms, guestroom suites, room service, and banquet meal service. Commercial hotels may offer laundry-valet service, uniformed services including concierge service, in-room refreshment centers, complimentary local transportation, and retail stores. Swimming pools, health clubs, tennis courts, saunas, and running areas may also be among a commercial hotel's offerings.

Airport Hotels. Just as railroads spurred the first expansion of hotels in the United States in the late 1800s and early 1900s, air travel encouraged a distinct type of hotel growth in the 1950s through the 1970s. Air travel did not really exist in its current form until modern commercial jet aircraft were introduced in the late 1950s. These jets traveled much faster and were much larger than earlier aircraft, and prompted dramatic economic growth in the United States. Demand skyrocketed for lodging facilities located near airports, especially international airports. Similar to the way hotels appeared near downtown railroad stations, hotels appeared near airports across the United States.

Airport hotels are popular because of their proximity to major travel centers. More than any other type of hotel, airport hotels vary widely in size and level of services. Typical target markets include business

clientele, airline passengers with overnight travel layovers or canceled flights, and airline personnel.

Hotel-owned limousines or courtesy vans often transport guests between the hotel and the airport. Signs announcing direct telephone service to nearby hotels for reservations and pick-up service are common in most airports. Many airport hotels feature conference rooms to attract a particular market: those guests who travel to a meeting by air and wish to minimize ground travel. Guests who stay at airport hotels and hold their meetings there often enjoy greater convenience and significant overall cost savings with such arrangements.

Suite Hotels. Suite hotels tend to be among the fastest-growing segments of the lodging industry. These hotels feature guestrooms with a living room or parlor area and a separate bedroom. Some guest suites include a compact kitchenette with a refrigerator and in-room self-service hot beverage service. In exchange for more complete living quarters, suite hotels generally have fewer and more limited public areas and guest services than other hotels. This helps keep suite hotels' guestroom prices competitive.

Suite hotels appeal to several different market segments: people who are relocating transform suites into temporary living quarters; frequent travelers enjoy the comforts of a "home away from home"; and

vacationing families discover the privacy and convenience of non-standard hotel accommodations designed with families in mind. Professionals such as accountants, lawyers, and executives find suite

hotels particularly attractive, since they can work or entertain in an area besides the bedroom. Some suite hotels offer complimentary evening receptions, breakfasts, or hors d'oeuvre or snack service. Such

gatherings give guests opportunities to socialize, which may be important for those staying at the property for extended periods.

Extended-Stay Hotels. Extended-stay hotels are similar to suite hotels, but usually offer more complete kitchen amenities in the guestroom. Extended-stay hotels are designed for travelers who intend to stay five nights or longer and require reduced hotel services. These hotels usually do not provide food, beverage, uniformed services, or valet services. In addition, housekeeping services may not be provided on a daily basis. Like suite hotels, extended-stay hotels attempt to establish a homelike feeling through their interior and exterior designs. In addition, unlike for most types of hotels, room rates in extended-stay hotels are often determined by the length of a guest's stay. Popular extended-stay brands include Extended StayAmerica, Homewood Suites, and Staybridge Suites.

Residential Hotels. Residential hotels provide long-term or permanent accommodations for people in urban or suburban areas. Located primarily in the United States, these properties house residents who want and can afford daily, limited hotel services. Residential hotels are not nearly as popular or prevalent as they once were. They have been replaced in part by suite and condominium hotel properties.

The layout of a residential guest unit may closely resemble a suite hotel guestroom. Guest quarters generally include a sitting room, bedroom, and small kitchenette. Sometimes people who contract to live

in residential hotels may be considered tenants by law. Residents may choose to contract for some or all of the services provided to guests in a commercial hotel. A residential hotel may provide daily housekeeping, telephone, front desk, and uniformed services. A restaurant and lounge may also be located on the premises.

Many other types of hotels also house semi-permanent or permanent guests, despite their emphasis on other markets. Likewise, residential hotels may also offer short-term, or transient, guest accommodations.

Resort Hotels. Guests often choose resort hotels as their planned destination or vacation spot, setting resorts apart from other types of lodging operations. A resort may be located in the mountains, on an

island, or in some other exotic location away from crowded residential areas. The recreational facilities and breathtaking scenery typical of most resorts are not typical of most other hotels. Most resort hotels provide extensive food and beverage, valet, and room services for vacationers. Many also provide special recreational activities for guests, such as dancing, golf, tennis, horseback riding, nature hikes, sailing, skiing, and swimming. Most resort hotels try to be positioned as a "destination within a destination" by providing a wide range of facilities and activities, giving guests many choices and fewer reasons to the leave the property.

A more leisurely, relaxed atmosphere distinguishes most resort hotels from their commercial counterparts. 

Resort hotels strive to provide enjoyable guest experiences that encourage repeat business and word-ofmouth recommendations. Recreational activities are frequently arranged for groups of guests. Resort

hotels often employ social directors who plan, organize, and direct a range of guest programs.

Resort hotel communities are an expanding area of resort development. These communities may be developed from existing hotel facilities sold as timeshare units or condominiums, or as new destination

properties developed specifically as resort communities.

Lifestyle Hotels. Lifestyle hotels are an additional lodging industry classification designed to further segment the marketplace. Lifestyle hotels are intended to appeal to specific travelers who enjoy certain

architecture, art, culture, special interests, and amenities. Guests appreciate these aspects of a lifestyle property and consider them important to their overall experience. Most major lodging companies have entered this market segment with new lifestyle brands, or are converting existing brands to lifestyle choices. In addition, many independently owned and operated lifestyle hotels are popular destination attractions.

Lifestyle brands reflect the interests of their guests. For example, some promote eco-friendly environments, while others promote healthful living or social interactivity. Some brands are directed at the

interests of a specific age group, offering amenities specifically designed for those guests. Lifestyle hotels tend to be constructed with 100 to 250 guestrooms and have limited or no meeting space. Food service offerings at lifestyle hotels vary, depending upon the brand design and market tier (for example, worldclass or mid-range). The interior décor, building and guestroom design, and many other ambient details (such as background music and artwork) contribute to the success of a lifestyle hotel guest experience.

Bed-and-Breakfast Hotels. Bed-and-breakfast hotels, sometimes called B&Bs, are an often overlooked group of lodging properties. B&Bs range from houses with a few rooms converted to overnight facilities to small commercial buildings with 20 to 30 guestrooms. The owner of a B&B, the host or hostess, usually lives on the premises and is typically the property manager. Breakfast service may range from a simple continental breakfast to a full-course meal. Thousands of B&Bs exist today, deriving popularity from intimate, personal service for leisure travelers. Some B&Bs provide such fine accommodations and service that they have earned some of the best ratings from highly respected hotel rating services. Most B&Bs offer only lodging and limited food service or, as the name implies, breakfast only. Meeting rooms, laundry and dry-cleaning services, lunch and dinner, and recreational facilities are usually not offered.

Due to limited services, the price for a room at a B&B tends to be lower than at a full-service hotel.

Vacation Ownership and Condominium Hotels. Another expanding segment of the hospitality industry is the vacation ownership hotel, sometimes referred to as timeshare or vacation-interval hotels. Vacation ownership properties typically attract individuals who purchase the ownership of accommodations for a specific period of time—usually one or two weeks a year. These owners then occupy the unit, usually a condominium, during that time. Owners who cannot or choose not to occupy the unit during their time period may have the unit rented or brokered by the management company that operates the hotel. Since the property functions as a hotel in many respects, travelers renting the unit may not realize it is actually part of a vacation ownership hotel. These hotels have become especially popular in resort areas, but some are also located in commercial areas and may be owned by area companies that need to house visiting executives or consultants. Owners may not be able to afford owning a condominium year-round, but can afford fractional ownership (ownership of a unit for a few weeks a year). One popular feature of vacation ownership hotels is the ability to trade ownership time with another owner in another location. For example, an owner of a beach-front vacation ownership unit may want to trade time in the unit for time in a winter ski unit. Often, the management company can work with the owner to find someone willing to trade. This allows owners the opportunity to vary their vacations each year, without giving up the benefits of ownership. Two major vacation ownership exchange companies are Interval International and Resort Condominiums International. Several major hotel companies are also represented in this market, including Disney, Marriott, and Hilton. The American Resort Development Association provides educational and representational services to this market.

Condominium hotels are similar to vacation ownership hotels. The difference between the two lies in the type of ownership involved. Units in condominium hotels have only one owner instead of the multiple

owners typical of vacation ownership hotel units. In a condominium hotel, an owner informs the management company of when he or she wants to occupy the unit. That way, the management company is

free to rent the unit for the remainder of the year. When the management company rents the unit, a portion of the revenue goes to the owner.

Vacation ownership and condominium owners receive the revenue from the rental of their units and pay the management company a fee for advertising, rental, housekeeping, and maintenance services. Vacation ownership and condominium owners are also responsible for furnishing and paying for the general maintenance of their units. In many cases, condominium and vacation ownership hotels were actually built

as apartment or condominium buildings and converted to lodging use. Normally, these units consist of a living room, dining area, kitchen, bathroom, and one or more bedrooms. Guest laundry facilities are often provided in the unit, but may be provided in a common area of the building as well. Guests of condominium hotels usually rent a unit for at least one week. Guests often contract for a specific unit at a

specific time each year.

Casino Hotels. Hotels with gambling facilities may be categorized as a distinct group: casino hotels.

Although the guestrooms and food and beverage operations in casino hotels may be quite luxurious, their function is secondary to, and supportive of, casino operations. As with resort hotels, casino hotels tend to cater to leisure and vacation travelers.

Casino hotels attract guests by promoting gaming and headliner entertainment. Most casino hotels provide a broad range of entertainment opportunities, including golf courses, tennis courts, spas, and theme recreational activities. Casino hotels may also provide specialty restaurants and extravagant entertainment, and may offer charter flights for guests planning to participate in casino activities. Gambling activities at casino hotels may operate 24 hours a day, 365 days a year; this may significantly affect the operation of the rooms and food and beverage divisions. Some casino hotels are very large, with several thousand guestrooms.

A special hotel format involves riverboat gambling. Since most riverboats do not provide lodging accommodations, hotels are often located where the riverboats dock to accommodate gamblers. These

hotels are not considered casino hotels because they do not have gaming as part of their facilities.

Conference Centers. While many hotels provide meeting space, conference centers are specifically designed to handle group meetings. Most full-service conference centers offer overnight accommodations

for meeting attendees. Because meetings are their focal point, conference centers typically place great emphasis on providing all the services and equipment necessary to ensure a meeting's success—for

example, technical production assistance, high-quality audiovisual equipment, business service centers, flexible seating arrangements, flipcharts and display screens, and so forth.

Conference centers are often located outside metropolitan areas and may provide extensive leisure facilities: golf courses, indoor and outdoor swimming pools, tennis courts, fitness centers, spas, running

and hiking trails, and more. Conference centers typically charge meeting planners a single price, which includes attendee guestrooms, meals, meeting rooms, audiovisual equipment, and related services. Guest amenities may not be as plentiful at conference centers, since these centers concentrate more on meeting the needs of conference planners and organizers than on meeting the needs of program attendees.

Conference centers may also accept transient business, but this is usually done to fill vacant guestrooms and is not a large portion of the business.

Convention Hotels. Convention hotels form another segment of the lodging industry that has grown significantly in recent years; demand for the convention market has nearly doubled in the past 20 years.

While most commercial hotels have fewer than 600 rooms, convention hotels—designed to accommodate large conventions—often offer as many as 2,000 rooms or more.

Convention hotels have a sufficient number of guestrooms to house a significant majority of attendees at most conventions. Convention hotels often have 50,000 square feet or more of exhibit hall space, plus ballrooms and an assortment of meeting rooms. Most convention properties offer dining facilities ranging from self-serve restaurants or cafeterias to elaborate formal dining rooms. Convention hotels are primarily directed toward business travelers with a common interest. A full line of business services is generally available, including teleconferencing, secretarial assistance, language translation, high-speed Internet access, and facsimile (fax) machines. Examples of convention hotels are the Gaylord Opryland Resort & Convention Center Nashville; the Wyndham Anatole Hotel in Dallas, Texas; and the Hyatt Regency in Chicago. Some casino hotels, like the Mandalay Bay and MGM Grand in Las Vegas, offer similar facilities.

Convention hotels usually attract the convention market for state, regional, national, and international meetings. While most hotels book the majority of their group business within two years of the meeting

date, convention hotels may book their business up to 10 years in advance. Many groups are so large that they have to book space that far in advance to ensure adequate facilities and housing for their attendees.

In some cases, convention hotels do not offer all the facilities necessary, but are affiliated with a local convention center. The local community usually owns the convention center, which often has its own sales force. Convention centers not only have space for meetings and conferences, they also have more than adequate space for exhibits and private booths. Some convention centers have more than one million square feet of floor space in a single building. Convention centers normally coordinate efforts with nearby hotels to ensure that guestrooms are available for convention attendees. Hotels, in turn, sell the convention center to appropriate markets to garner guestroom business.

Alternative Lodging Properties. Besides hotels, there are several other types of lodging establishments that compete for business and leisure travelers. Recreational vehicle parks, campgrounds, and mobile home parks are somewhat like hotels, since they involve the rental of space for overnight accommodations. But although similarities exist, these alternatives stand apart from other lodging

facilities. In some resort areas, parks and campgrounds strongly compete with traditional lodging operations because they appeal to a broader range of travelers. For example, many state and national parks

offer campgrounds and lodges that compete directly with hotels. These facilities may have an advantage over local hotels, since they are located on park land, are usually competitively priced, and may be

subsidized. Unlike hotels, however, campgrounds and recreational vehicle parks require that guests bring their accommodations with them.

Still another form of alternative lodging is the corporate lodging business. Corporate lodging is designed for guests wishing to stay for very long periods of time, often up to six months or longer. While hotels are usually designed for guests staying one to ten nights, corporate lodging is better suited to guests with very long stay requirements. Guests often include business executives moving from one city to another, consultants on temporary assignments, corporate trainers, professional athletes, and personnel connected to special projects such as movie shoots. Instead of guestrooms, corporate lodging usually provides fully furnished apartments for guests. In many cases, the building owners provide the apartments. In other cases, a service provider supplies the apartment to the guest. The service provider rents the apartment, and provides the furniture and housewares, as well as housekeeping and other services, to guests. Since apartments are used instead of hotel buildings, a single provider in a community can provide corporate lodging in many community locations, allowing guests greater flexibility. Corporate lodging is usually cost-competitive with hotels, since apartments can be rented and furnished by the owner or service provider for a lower daily cost than that incurred by hotels. Corporate lodging has been a major growth industry recently, expanding well beyond North America to Europe and Asia. Some hotel companies have corporate lodging divisions, including ExecuStay by Marriott and BridgeStreet Worldwide by Interstate Hotels & Resorts. Other corporate lodging companies are divisions of residential real estate companies, such as Equity Residential and Charles E. Smith.

The cruise ship industry is another example of alternative lodging. Cruise ships have become major competition for resorts, especially in the Caribbean region, and are primary competitors of resort hotels.

They offer many amenities similar to those offered at island resorts, while offering the unique advantage of moving from island to island as part of the experience. Modern cruise ships offer all the advantages of resort hotels. Cruise ships come equipped with many modern conveniences, such as fitness centers, movie theaters, multiple dining and cocktail lounge facilities, spas, casinos, shops, and ship-to-shore communications, including satellite television and Internet access. Cruise ships may be small, offering as few as two dozen cabins, or large, with several hundred cabins or more. Some cruise ships even offer small conference facilities for corporate or association meetings.

Section Keywords

hotel A general term used to describe hotels, motels, motor hotels, inns, suite hotels, conference centers, resorts, and other operations providing lodging facilities, various services, and conveniences to

the traveling public.

target markets Distinctly defined groupings of potential buyers (market segments) at which sellers aim or "target" their marketing efforts.

market segmentation The practice of defining or identifying smaller, distinct groups or 'segments'

within larger markets; corporate business travelers, for instance, is a segment of 'business travelers'.

Section Endnotes

Endnote #1.1 : Floyd Miller, Statler—America's Extraordinary Hotelman (New York: Statler Foundation,

1968), p. 36.

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