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EP150: This Week in the World of Airbnb

One of the more frustrating aspect of international travel is cell access. Wi-Fi isn’t always available, and additional data plans can be costly. What do you do without access to maps and information? It can make for a harrowing experience in an unfamiliar place where you may or may not be able to communicate with the locals. Just ask Jasper about his trip to Moscow!

David Jacoby, Co-founder and President of Hostfully, joins Jasper to discuss all of the ways that Airbnb is trying to do the right thing. To start, the company is developing a solution to the cell access problem, and their patent application made headlines this week. Airbnb is also working to make things right with regard to racial discrimination on the platform, as well as host non-compliance with regulations in the city of San Francisco.

In addition to those stories, David and Jasper cover an organization that is most decidedly not concerned with doing the right thing. Listen in and learn about the misleading anti-Airbnb ad sponsored by Share Better DC.

Topics Covered

Article #1: Airbnb is Trying to Solve This Irritating Problem for Travelers

  • Patent submission for device geared toward travelers with no Wi-Fi or cell network access
  • Would allow traveler to download trip info (i.e.: maps, messages, etc.)
  • Convenience for hosts of international travelers
  • Evidence of Airbnb’s intention to expand beyond home stays
  • Aligns with Chesky’s commitment to solve the problems of travel

Article #2: Airbnb, HomeAway Reach Deal with San Francisco Over Registering Hosts

  • Ends lawsuit filed in June over rules imposing steep fines for unregistered hosts
  • 2,100 hosts registered, 8,000 listings in the city
  • Hosts will be able to register through the company websites (rather than in person)
  • Airbnb will share information with the city for verification
  • Goes into effect in eight months
  • A significant drop in the number of listings is likely
  • May have unintended consequences, e.g.: renters migrating to unregulated platforms, loss of tax revenue

Article #3: Woman in Anti-Airbnb Ad Showing Anacostia is an Actress

  • Misleading anti-Airbnb ad sponsored by Share Better DC
  • Woman in commercial is an actor from NYC

Article #4: Airbnb Will Let California Screen Some Hosts for Racial Bias

  • Agreement with California Department of Fair Employment and Housing
  • DFEH will create fake accounts to see if host is complying with fair housing laws
  • Screenings limited to hosts with three or more listings (6,000 of the 76,000 total)

Resources Mentioned

Article #1: refinery29.com/2017/04/152318/airbnb-problem-solving-wifi-for-travelers

Article #2: marketwatch.com/story/airbnb-homeaway-reach-deal-with-san-francisco-over-registering-hosts-2017-05-01

Article #3: nbcwashington.com/news/local/Woman-in-Misleading-Anti-Airbnb-Ad-Showing-Anacostia-Is-An-Actress-420752283.html

Article #4: fortune.com/2017/04/29/airbnb-california-racial-bias/

Harvard Study on “Racial Discrimination in the Sharing Economy”

HSDC Trade Show


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Email: jasper@getpaidforyourpad.com

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Complete Transcript for Get Paid for Your Pad Episode 150

Welcome to Get Paid For Your Pad, the definitive show on Airbnb hosting, featuring the best advice on how to maximize profits from your Airbnb listing, as well as real-life experiences from Airbnb hosts all over the world. Welcome.

Jasper: I began using a really cool service from Aviva IQ, and it’s made my life so much easier. My guests love receiving all the important details about their stay exactly when they need it, and I love all the five-star reviews I’m getting on communication. Check them out at www.avivaiq.com.

What’s up, everybody? Another news episode, Get Paid For Your Pad, today co-hosting with David Jacoby. And, of course, he’s the cofounder and President of Hostfully. David, how’s it going?

David: Hey, Jasper, it’s great. Great to be here. Thanks again for having me.

Jasper: I feel like it’s been a long time since I talked to you.

David: Probably about a month.

Jasper: Yeah, it feels like a long time.

David: It’s great to reconnect. I missed you, Jasper.

Jasper: Aw, that’s nice to hear. I wish I could say the same. Ha-ha! Wow, that was pretty mean.

David: Ouch.

Jasper: You know what? Let’s start. I have a funny story to share, and it kind of leads into our first topic of today.

So, I think I mentioned before that I’m a member of this app called JetSmarter, and it’s kind of like an Airbnb for private jets, so you pay a yearly membership fee and then you get to use private jets.

David: Fancy, fancy.

Jasper: Basically, as much as you want for a year. I don’t know how they do it.

But, anyway, there was this flight from London to Moscow, so I figured, “I’ve never been to Moscow, let’s jump on this flight.” It turns out, it’s a big jet. It’s a 12-people jet, it’s a Legacy 600, and there’s only one other person on the flight, who’s some Russian dude. So, I get on the flight, it’s obviously a really amazing aircraft, and we sit at this table. There’s unlimited champagne, so I’m drinking champagne with this Russian guy, and we’re chatting about Moscow and stuff. But then, I arrive and I get an Uber, and my phone doesn’t work in Russia. And so, I rented an Airbnb…

David: So, how did you get the Uber?

Jasper: Well, because they have Wi-Fi at the airport. So, I got the Uber, somebody helped me, also, with it, and I figured I’d just give the taxi driver the telephone number of my host. Now, the taxi driver doesn’t speak any English.

So, I get into the Uber, and you know, it all goes well. I get to the right street, because I could read… I learned a little bit of Russian, so I can read the alphabet that they have, and we’re on the right street, but it’s dark, it’s almost midnight. I arrived very late, the taxi driver doesn’t speak any English, and I don’t know where to go. The taxi driver stops, and so I tell him to call the host. And the host picks up the phone, and they start arguing in Russian, and in a very unfriendly way. You know, the guy’s getting really upset, and he’s yelling in the phone. And I’m thinking, “Whoa, what’s going on? It should be quite easy for two Russian people to figure out where we need to go.”

Next thing I know, he starts driving again and I’m thinking, “Oh my God, what am I doing?” And then, he stops again, he calls the lady again, and they start fighting and arguing. And this guy, at some point, looks just so pissed off, I think he’s going to kick me out of the car. And I’m in the middle of Moscow, my phone doesn’t work, I don’t have any rubles, I don’t speak Russian, I’ve never been to the city, it’s midnight… What am I going to do? And then, finally, the woman shows up and she shows me the apartment, and it’s all good.

But, you know, there’s an interesting problem when you travel a lot, which is that, in a lot of countries, your phone just doesn’t work, or it’s incredibly expensive. You know, the roaming charges are just insane sometimes. And Airbnb is thinking about a solution for this, so I really appreciate what they’re thinking about. They want to get a patent for a little device that you can use that connects you to the most important information that you need as a traveler, worldwide, without having any cell network access, or Wi-Fi, or whatsoever. And it’s going to allow you to just download your trip information, like maps, messages, just kind of like the essentials, the bare necessities that you need when you arrive in a new country.

And so, I think that’s a great idea.

David: Wow, Jasper. Well, first of all, it sounds like an exciting story, and I’m glad you made it to your place okay and you can enjoy Moscow now.

Jasper: I definitely am enjoying Moscow, by the way.

David: Awesome. Yeah, it seems pretty interesting, that announcement that they made, and this really falls in line with what Airbnb’s been talking a lot about lately, on expanding beyond just home stays. Of course, Trips is their biggie, and they’ve been talking about doing airfare, and different modes of transportation, and now they’re moving into the hardware space, and it seems like they’re kind of going to the areas that Facebook and Google and Apple, and some other tech companies are trying to play around with. So, it’ll be interesting to see how they start competing in this new area for them. It makes sense, too, with regards to having local information and being able to access that while you’re traveling, so it kind of falls in line with their larger message.

And this is, on a smaller level, something that I deal with on a pretty regular basis with Hostfully, where we’re talking about sharing important local information, and hosts struggle with that because they oftentimes have guests from other countries and they’re not able to access their Airbnb app, which still, even though it’s an app that you’re downloading, not all the stuff is saved offline, so you need to have Wi-Fi or data plans. So, oftentimes, people will send PDFs or just send all the information in an email so the guests can have that. So, this will make this easier, and cooler, and just more accessible.

Jasper: Yeah. And, you know, a while back, Brian Chesky did this Twitter chat. Do you remember that?

David: Right, yeah.

Jasper: Yeah, we talked about it a few months ago. You know, I really get the impression that he’s very serious about just figuring out what the most annoying problems are in the travel space, and basically trying to solve those, which I think is really cool.

David: Right. The most recent tweet he made, I think, was about flying, and something along the lines of, what if it wasn’t the most painful part of a trip, but rather the most exciting part of a trip, or something like that. So, we’ll see where he’s headed with that.

Jasper: Yeah. You know, I actually tweeted him a few weeks ago because I had this crazy idea when I boarded the plane, and I had a window seat, but I was in the last boarding group. And so, when I entered the plane, almost everyone was already sitting, but then two people had to stand up, block the hallway, for me to get into my window seat. And so, I was thinking, what if we board all the window seats first, and then the middle seats, and then the aisle seats?

David: Yes, very clever. I like that. It makes sense to me.

Jasper: So, I hope he saw my tweet. He didn’t respond.

David: Well, we’ll see where they go with this, and if I understand it correctly, it actually is a hardware device. So, is it a whole new phone that they’re getting into, or separate from the phone, or is it eventually just going to be software that you can install on any phone that you have? So, I still think there’s a lot of outstanding questions with this Pana application. It’s very early stages.

Jasper: Absolutely, but I definitely like the idea. I’m not very technical. I don’t understand how all this stuff works, but if they can make it happen, that’s really cool.

But, let’s get into the next item. So, I know that something very important has happened in San Francisco, and I’m sure you know all about this.

David: Yes, hot off the press yesterday, they made a big announcement that Airbnb and HomeAway just settled with the City of San Francisco regarding a law that was passed a while ago, and then a lawsuit after that. And, basically, I’ll tell the joke in a minute, but the punchline is, you must be registered to be listed on Airbnb. You must be a legally registered host with the City of San Francisco, and that will go into effect in eight months, it seems.

So, backing up a little bit, as some people know, San Francisco has been a kind of hotbed for legislation around home sharing, and some laws were passed about three years ago now that allowed for home sharing to be legal. You have to live where you share your home. So, if you own a second vacation home here in San Francisco, you can’t rent that out on short-term rentals on a full-time basis. You must live there, and you can rent it out as much as you want if you’re hosted, if you’re living there, and for 90 days a year unhosted. So, if you’re traveling over the summer, you could rent your whole place out.

So, an additional law was passed last year that basically said Airbnb would be fined if they list listings that aren’t registered, and Airbnb said, “Hold on one second. We’re just a platform. We’re no different from Craigslist, and we can’t be held liable if there are illegal listings on our site.” And, essentially, the judge ruled differently. The judge said that because Airbnb is taking a part of the financial transaction, they are different from Craigslist, and therefore, they can be liable and they do need to do some of the enforcement. And, basically, he told Airbnb and San Francisco, “You guys go to a room and figure it out.”

So, for about half a year now, it’s been under mediation, and finally, they came out with an agreement. Basically, the city won in a big way, in that they must be registered to be on the site. So, right now, there’s about 2,100 registered hosts in San Francisco, and there’s anywhere from 8,000 to 10,000 listings on Airbnb. So, over the next eight months, there’s going to be a lot more people that are going to get registered, which is really good news. And then, there will also be a lot less listings on Airbnb, most likely, because not everyone will get registered.

What also must happen now is, Airbnb needs to provide the city, on a monthly basis, with sufficient information to allow the city to verify that the unit is, in fact, registered. So, I’m not exactly sure what all those details are, but Airbnb will be sharing some information to the city to help with this enforcement.

This seems similar, Jasper, to what was done in Chicago. I know that they’ve helped with the registration process in Chicago, and it seems like Airbnb and HomeAway will be helping that, too. So, if I go to Airbnb, I want to be a host, I can now sign up and register through Airbnb’s website or through some third-party website that they’re allowing, versus having to actually go in to the Civic Center government building and have to register in person. So, they will be streamlining the process, and that’s good news.

All right, I’ll take a breather, Jasper. How does all that sound right now?

Jasper: Well, first of all, I remember, I was in San Francisco last year and I interviewed somebody from the Home Sharers Democratic Club, Bruce Bennett, and he showed me the process of getting registered, and I looked at it and I was like, “Wow!” So, I’m not surprised that not everybody registered because it’s a pretty complicated process that they came up with. So, I think it’s really good that Airbnb is facilitating and making it easier for hosts to get registered because I’m pretty sure that a lot of hosts don’t have a problem with registering, but, you know, if you make it really hard, if you make people go to City Hall and fill out all these different forms and applications, and God knows what, then yeah, a lot of people aren’t going to do it. So, I think it’s a good move.

David: Yeah, it will be interesting to see. This big gap right now, there’s 2,100 registered hosts in San Francisco, and around 8,000 or so listings on Airbnb, so in eight months from now or nine months, after things go into effect, it will be really interesting to see how many listings there are. Some haven’t registered because it’s a pain, and I’m sure there are many who haven’t registered because they can’t. Many of them are probably renters and it goes against their lease with their landlord, and they’re probably doing it under the radar and don’t want to get caught, and as part of the registration process, the landlord actually gets a letter that that unit has been registered for short-term rentals, or applied for short-term rentals. So, we’ll see how big a number that is and how things change.

For those who are acting legally, like myself, here in San Francisco, I guess the good news is that there most likely will be a significant amount less listings, so the supply is less, so the price will go up. So, those that are acting legally will be able to charge a little more.

Jasper: Yeah, and a lot of people will get more bookings, as well, I guess.

You know, it’s also interesting because I think the good about this is, also, it motivates people who are renting, instead of doing it under the radar, to actually discuss these things with their landlord and come to some win-win situation because, I think, in a lot of situations, it’s not actually that bad for the landlord to have a renter who does Airbnb because, you know, if you’re renting on Airbnb, you need to make sure that the place is clean, you need to make sure that the place is well-maintained. You know, that’s a lot better than if you have somebody in your house who lives there and basically doesn’t mind living in a pig stall and makes a big mess.

David: Yes, for sure. We’ve talked about this before. Oftentimes, people who do home sharing, they keep their place cleaner, so you would think a landlord would want their tenants to be able to do that, so it will make it easier for them to stay, they don’t need to have a month or two where their place is not collecting rent because they have a high turn in tenants. So, it’s good to have tenants that are happy, that are able to afford to stay there, and that are keeping the place clean.

Jasper: Hosts, does it feel like you’re spending way too much time responding to questions from your Airbnb guests? Is the fear of a possible bad review keeping you up at night? I recently learned about a really helpful service called Aviva IQ. With Aviva IQ, my workload and worries have reduced dramatically. All I had to do was link my Airbnb listings to Aviva IQ, create my messages, and schedule delivery times. That’s it! I can’t believe how easy it was to set up. Now I can sit back and relax, knowing that my guests receive all the important details on time every time. Everybody sleeps better. Check them out at www.avivaiq.com.

David: Some other things about the new settlement, the new agreement, I wonder if there will be any unintended consequences out of this. For example, will there be a rise in Craigslist now? With a lot of these listings, a lot of these renters, they’ll be kicked off Airbnb, but that doesn’t mean they’ll stop doing short-term rentals. So, now they might just go to other platforms that aren’t being regulated as much. They’ll be going to Craigslist, for example, and there’s other booking platforms. And what happens with that now, one is, there’s less monitoring of that. You know, with Airbnb, if there’s a problem, you can call Airbnb and they will do their best to help settle it, to varying degrees of success, but still better than nothing.

Additionally, there’s a lot less tax money that’s being collected. Right now, Airbnb is, for every reservation, they’re collecting the hotel tax, the TOT tax, and remitting it to the city, even if the host isn’t registered. Every reservation, they collect the tax and pay it to the city. Now, all these reservations are going to other platforms and tax is not being collected, so the city will possibly be losing money with this.

So, we’ll see what else results out of having more legally registered people on Airbnb, what’s going to happen to these other bookings platforms.

Jasper: Yeah, I totally agree. I think that a lot of people will go to the other platforms, and I think either two things will happen. One, the city will strike a similar deal with the other platforms, or they won’t, and then Airbnb and HomeAway are probably going to complain about it.

David: Right. And one significant difference is, with places like Craigslist, they are protected legally, where they can say, “We are just a platform. We have nothing to do… We are not responsible for what’s being put up on our site.” And the difference with Airbnb is that they’re actually collecting a commission. You know, they’re getting that fee from both the host and the guest, so the judge said, “You are involved, and you do have a role in this, and you must regulate. You must help them comply with the law.” But, Craigslist doesn’t collect any money, so they fall outside that jurisdiction. So, it’ll be a harder case for the City of San Francisco, or anyone, to go after Craigslist and say they must regulate and make sure only registered people are listed on the site.

Jasper: Right. And I guess Craigslist is the only one because all the other platforms, like booking.com, TripAdvisor, Expedia, 9flats, FlipKey, all those other ones, they all take part of the transaction, as well, which is interesting because, I remember, when I started living in the U.S., you know, there’s two things that surprised me about the U.S., number one, that they still use checks, like written checks, and number two, that people use Craigslist, and that was almost like 10 years ago.

David: Yeah.

Jasper: But, you know, people still use Craigslist, and I guess, maybe, people will start using it more if a lot of the short-term rentals are also going to reside on that platform.

David: We’ll see.

One final thing about this, too, what’s been going on in San Francisco… After the original legislation was passed about four years ago, three years ago, there’s been more regulation that’s been tried to get passed, there’s been a ballot initiative, the famous Prop F that got voted down, there’s one law that did get passed that the mayor vetoed, another one that did get passed that the mayor signed. So, there’s been a lot of uncertainty and instability, and I think that scared a lot of people from wanting to register because they’re not sure what’s going to happen next.

So, hopefully, with this settlement, everyone can take a deep breath and chill for a little, and let this go into effect, and not have more laws try to be passed, putting more caps in place and other stuff like that. Once this goes into effect, then maybe we can look at small tweaks to really help home sharing and help the city, as opposed to the kind of punitive laws that have been tried to be put in place lately.

For example, one thing that I think would be great for both San Francisco and other cities that are dealing with this, is to have like a 30-day waiver, essentially, where if you want to be a host, give it a try. You can host for 14 days or for 30 days without having to register and go through all the hoops of dealing with the city, you know, business license and stuff like that. Give it a try, see if you like it, you can do it for 14 days, you can do it for 30 days, and then, if you want to do it more, then you need to register.

Jasper: That sounds like a fair deal.

By the way, one last question. You mentioned the 90-day rule for unhosted hosts. Is Airbnb going to enforce that, as well, or not?

David: I believe so. So, they’re going to enforce who’s registered or not, actually. So, my understanding is, they’re going to say if the host is registered or not, and then, I still think the host needs to respond on a quarterly basis to the city as to how many nights were hosted and how many nights were unhosted. I don’t know if Airbnb, how well they themselves are able to actually track if the hosts slept in their home or not. So, right now, how it works is kind of an on-your-honor system, where the host is providing that information on a quarterly basis to the city.

Jasper: Okay. So, they’re not doing what they’re doing in Amsterdam and London, for example, where they literally just put a lock on your calendar after you’ve hosted for a certain amount of days.

David: Well, that’s because, I think, the law is different, right? The law in Amsterdam is, you can only host for 90 days, period, and in San Francisco, you can host for the whole year if you’re living there.

Jasper: Right, but it’s the sort of thing in Amsterdam, if you list your place as an entire home, then the  calendar gets blocked after 60 days, but if you list it as a private room, then you can rent out the whole year because they assume that you’re a hosted host.

David: Gotcha. So, it’s how you list it on your site, as whether you’re a hosted site or not.

Jasper: Exactly.

David: Oh, that’s interesting, too. So, we’ll see how that happens, because many people here have places that are listed as private, but it’s not an actual legal second unit. It’s just kind of like an extra room in the basement that has a private entrance, so they can list it as private. So, we’ll see how that goes. I’m not sure.

Jasper: Awesome. Well, we’ll talk about it in another episode.

But, let’s quickly dive into a few of the other news items. One interesting item is about… So, there was this anti-Airbnb ad that I think was financed by that group, that hotel lobby group or organization, I don’t know exactly what it is, but you know, who are trying to get more regulation, this affordable housing advocacy group, Share Better. I think it’s mostly the hotel lobbyists who are in there. They had this ad where this very emotional woman was talking about, her neighborhood doesn’t feel, anymore, like the place where she grew up and raised her children. You know, it’s that these Airbnb renters have filled her neighborhood with strangers, and you know, this whole horror story.

And then, it turned out that this woman who was in the ad was actually an actor. I mean, in the ad, she’s talking about Washington, D.C, Anacostia, and it turns out, she actually lives in New York City. So, I mean, it’s pretty funny.

David: Yes. It can show you how sleazy the other side can be sometimes. So, Share Better D.C., they’re kind of a division, I guess, of the larger Share Better umbrella. Share Better started in New York, and they were funded by the hotel groups, Hotel Association primarily, as a way to combat home sharing in New York, and then they branched off into San Francisco, actually, and they’ve been a big part of the Prop F of a few years ago and anti-home sharing initiatives here San Francisco. So, I guess they’ve expanded into other areas, too, including D.C.

So, it’s funny that they are trying to be all authentic in showing this local person who’s complaining about the bad impact of home sharing on their neighborhood, and sure enough, it’s someone that they hired, an actress from New York.

Jasper: Yeah, it’s pretty silly.

There’s one more thing that I wanted to talk about, and that has to do with the racial discrimination that has been, apparently, taking place on the Airbnb platform. I think Airbnb is very worried about this because it’s very bad media, it’s very bad publicity for them. And so, you know, they’ve already been doing a lot to try and sort of encourage hosts to not discriminate, but now they’ve gone a step further, where the California Department of Fair Employment and Housing has reached an agreement with Airbnb to monitor whether some hosts on the platform act with racial or other form of bias when choosing guests.

And, basically, what they’re going to do is, under the agreement, there will be screenings, and this only applies to hosts with three or more listings, which is about 6,000 hosts in California. And they’re basically going to create fake accounts with people with different racial backgrounds, and then they’re going to request to stay at places and see if the hosts are discriminating.

What do you think about that?

David: Yeah, I think that falls in line with normal housing laws and practices here. So, for them to be applying it to short-term rentals, in addition to long-term rentals, it isn’t that big of a step for the Department of Fair Employment and Housing to do that.

It’s interesting because, we’ve talked about this before, there was a famous study by a Harvard professor that showed that blacks were 16% less likely to be accepted. And I think this is good. Airbnb, Brian Chesky, made a whole big deal about, “This is something that we’re tackling, and maybe we’re a little late to the party, but this is a very important issue.” So, it makes sense for them to be in compliance with this and to be supporting them.

You know, on a technical basis, I think it’s illegal…or not illegal. I think it’s against the terms of service for Airbnb. If you create multiple accounts, you know, they’re obviously lifting that to allow for the department to set up multiple accounts and to be able to do these tests. And, it only applies to a small fraction, as you said, 6,000 out of 7,600 listing in California, for example, so that’s about 7%, 8%, and also, of that, only those that have received discrimination complaints, so that’s going to be even significantly less than that.

So, I think it’s good they’re doing this.

Jasper: Yeah, I think it’s definitely good that they’re only doing it for people who have complaints. I think they have to be very careful, though, because, you know, as a host, when you look at the profile of somebody who wants to book your place, I mean, I think there’s a lot of factors that you take into account, right. And so, I think they have to be careful that they’re not basing their conclusions on one or two booking requests because it could be other reasons, other than race, that people choose to decline certain requests and approve certain requests.

David: Yeah, that’s true. So, the devil’s in the detail here, and if they are able to have multiple accounts and they can basically have everything be the same except the name or except a picture, and both be applying for a certain date, there’s some fairly easy ways to show that there aren’t these outside factors, why the host’s saying no, but it really is because of discrimination reasons.

Jasper: I think they call that ‘ceteris paribus’ in Latin – all other things being equal.

David: All right. Look at you, Jasper.

Jasper: Yeah, I think that was a pretty smart way to end this episode.

All right, David, well, thanks a lot for joining me today. It’s always a pleasure, and I will talk to you again in four weeks.

David: Fun stuff, Jasper. Let’s do it again.

And I’m sorry I’m missing you in San Francisco for the big trade fair that we have coming up on May 18th. We already have over 20 vendors for that, including HomeAway, and Airbnb, and HostWell as platinum sponsors, so it’s going to be pretty exciting. We’ll miss you. I was hoping to do a live episode, but we’ll have to do a live episode another time, next time you’re in San Francisco.

Jasper: Absolutely, and I will be in San Francisco this summer.

David: Awesome.

Jasper: So, I look forward to staying in your lovely bedroom.

David: Can’t wait.

Jasper: All right, thanks, David. And thanks to all the listeners.

David: Guest bedroom, that is.

Jasper: Guest bedroom, yes. I would not want to share a bed with you. You snore way too loud.

All right, everybody. Thanks for listening, and we’ll see you next time.