Cancellation of Davos 2021 may be a blow to economy, but at least it’s less drama

Although Davos may suffer financial setback, postponement of the event means the public will have to deal with fewer traffic jams and won't have to pay the cost of security for the event.

A view of Davos | Twitter: @wef

Davos: The Swiss town of Davos will have a quieter-than-usual start to 2021, relief for some residents but a concern for others.

The postponement of the World Economic Forum’s annual gathering because of the coronavirus means it won’t be playing host in January to the world’s rich and famous.

The event attracts thousands of delegates every year, from billionaires and bankers to politicians, celebrities and activists. It’s a money-spinner for many of the shops and businesses in the ski resort deep in the Swiss Alps, though also hugely disruptive.

“It’s of course a huge blow” for local businesses, said Esther Heldstab, who runs a souvenir shop in Davos. “It’s the biggest source of income that we have every year.”

The WEF’s decision will leave restaurants, bars and hotels devoid of the usual deluge of guests, and local workers without contracts for transforming shops on the town’s main drag into branded corporate lounges. Many store owners shut temporarily and rent their spaces out for promotional events and private parties.

It all benefits the municipality. A University of St. Gallen study estimated that the 2017 meeting generated roughly 60 million francs ($66 million) in revenue for the Davos economy, and about 2 million francs in local tax revenue.

Belt-tightening is the order of the day at the privately financed Kirchner Museum, whose minimalist galleries featuring German expressionist work are right next to the conference center and are a popular spot for companies’ receptions, including that of JPMorgan Chase & Co.

“We expect revenue to be lower in 2021,” said Severin Bischof, the gallery’s business chief. “We’re thinking in various directions and are in discussions with our board about new sources of revenue” such as new sponsors or hosting private events.

The town still has a chance to make up for the loss of business in January. As of now, the WEF’s plans are to hold the event in the early summer.

Michael Straub, the town’s first secretary, is less downbeat than some locals. He argues the economic impact of the cancellation is hard to estimate, because although a drop in international guests will be “painful,” an increase in local tourism will help compensate.

Many in Switzerland vacationed at home this summer and with no vaccine likely yet available, there’s a good chance they’ll spend their winter ski break locally too. With no WEF hubbub, Swiss holidaymakers may be willing to venture into Davos in the latter half of January.

That’s what the five-star Hotel Seehof, in a prime position by the ski runs, is banking on. Sitting in the lobby on Thursday — a day after the WEF’s announcement — Manager Tobias Homberger took developments in his stride.

“Some sources of income will disappear, but we’ll also have lower costs,” he said. For example, he normally has to hire someone just to deal with the WEF accreditation badges. Now that won’t be necessary.

“We have the chance of having quite a good January,” he said. “I don’t think it’s that dramatic.”

The immense security operation, involving police cordoning off the center of town and placing snipers on the rooftops to guard the legions of foreign dignitaries, costs the people of Davos alone more than 1 million francs each year.

Add to that rerouted bus lines, noise and congestion that residents say makes it dangerous for young children to walk to school. Heavy snowfall in 2018 caused severe traffic jams and had locals up in arms over the droves of black limousines favored by attendees jamming up streets.

Heldstab, the souvenir shop owner, sees a silver lining in the postponement. If the WEF is held in early summer, there won’t be any snow.

“It’ll be much easier for logistics,” she said. – Bloomberg