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Saturday, Apr 20, 2024

Davos is dead

Davos is dead

The world’s most elite conference is postponed, again.
Hold the caviar and put the mink back in the closet.

Davos is dead, again. The glitzy and eagerly awaited World Economic Forum annual meeting scheduled for the Swiss mountain resort on Jan. 17-21 has been shelved for the second year in a row, replaced by a series of online discussions.

The postponement — due to Omicron’s emergence — is the latest in a series of failed efforts by WEF to return to in-person meetings during the Covid-19 pandemic, and puts financial pressure on the organization, with tens of millions of dollars of event income at risk.

In 2020, WEF’s Davos conference attracted more than 100 billionaires and 53 heads of state or government. Companies — still mostly from the U.S. and Europe — pay around $50,000 per person for a coveted “white badge” to access this guest list.

WEF’s event fee income dropped from around $45 million in 2020 to zero in 2021. Membership and partnership fees range from $65,000 to $650,000, “depending on the level of engagement,” per WEF.

Membership fee income was down $7.5 million in 2021, with companies such as BT, a European telecoms giant, cutting ties. “We took the decision to end our partnership with the WEF earlier this year,” Richard Farnsworth, a BT spokesperson, told POLITICO.

Local businesses in Davos — Europe’s highest altitude town — depend heavily on the influx of rich visitors each January. While each company is allowed only five white badge holders, entourages of lower-level executives, assistants, drivers and chefs can number more than 100 for the largest companies attending.

Shops and bars are turned into elaborate pavilions and exhibition spaces, while the going rate for a bunk bed in an apartment is close to $1,000 per night. Don’t ask about the chalet prices.

Organizers are hoping to shift the 2022 Davos conference to summer 2022, but a similar plan to move the event to a literal island of Covid safety fell flat in 2021.

Klaus Schwab, WEF’s executive chair, announced with fanfare in December 2020 that the winter Davos conference would move to Singapore in May 2021 as a way to escape the pandemic. That plan was then delayed until August 2021 and eventually canceled altogether after a local surge in Covid-19 cases.

Amanda Russo, a WEF spokesperson, downplayed the impact of postponing the 2022 conference. “The annual meeting is just one touch point alongside the day-to-day work of our nearly 20 platforms. Our partners sign on as members to work year-round,” Russo told POLITICO.

Following the emergence of the Omicron variant in November, WEF successfully scrambled to pause — until the week after the scheduled January event — a new Swiss rule requiring 10-day quarantine for foreign visitors that would have upended the Davos conference.

Hundreds of executives parachute into the Swiss mountain resort each year for the conference, many of them on private jets, and some of them for as little as 24 hours: a schedule incompatible with quarantining.

Does Cristal make a sound if only 100 people hear it popping?

Even with a pause on quarantine rules, Davos event planners had been flummoxed in recent weeks by a series of changing local restrictions, including severe limits on the number of attendees at private events, and concerns that the event would eventually be canceled.

Davos stalwarts including the Wall Street Journal and CNBC called off plans for their regular pavilions and lounge spaces. Companies such as JPMorgan meanwhile wondered whether to go ahead with their evening receptions at cavernous local art galleries, if those spaces had to remain nearly empty to comply with Covid rules.

WEF sought to reassure its stakeholders via email and its exclusive Toplink social platform in early December that the event would proceed. Even so, regular Davos attendees remained skeptical that the event could proceed as planned.

“As a crisis manager, we had doomsday scenario planning in our recommendation to clients anyway,” said one consultant at a Washington lobbying and public affairs firm. “You simply have to do that in 2022, or ‘2020: Part Three’ as I am calling it.”

WEF remains upbeat, for now.

“The deferral of the annual meeting will not prevent progress through continued digital convening of leaders from business, government and civil society,” Schwab said.

While some aspects of WEF’s work continue to expand — such as a Stakeholder Capitalism Metrics program that has grown to include more than 100 companies — the next challenge for WEF is more practical: dealing with badge-holders requesting refunds on their tickets.

Davos badges are "100 percent refundable until the start of the meeting," per a WEF document obtained by POLITICO. But CEOs' expense reports might be stuck eating the hotel suites and unopened cases of Cristal.
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