Will the famed World Economic Forum in Davos, Switzerland, be COVID’s latest victim? Does jetting into “Davos,” as the exclusive annual event is known, for a week of expensive wine and hobnobbing still make sense for its stable of tycoons and world leaders, given the cost of the program and the health risks of the pandemic? What’s Klaus Schwab, the 82-year-old founder of Davos, going to do in the face of an increasing existential threat to his baby?
Those are questions making the rounds these days on Wall Street since the annual membership fees into the splashy club for big sponsors can apparently run as high as 1 million Swiss francs. “They are going to have a problem,” one regular Davos attendee explained to me. “…A lot of my friends are putting their Davos membership on hold. You are allowed to suspend it for two years before you lose your membership. And I know many people that are exercising that right now. What Klaus is doing is he’s calling those people and he’s saying, ‘Hey, please don’t do that. I need your help right now.’”
What’s clear is that Davos is not going to go down without a fight. The organization has taken a number of prophylactic steps to try to keep the World Economic Forum off the economic ventilator. Since the outbreak in March, the World Economic Forum has had more than 220 virtual Zoom events as a way of trying to stay relevant during the pandemic. Then, in August, the Forum’s board of governors decided to reschedule the physical January 2021 gathering in Davos and decided to replace it with a virtual event. “It was a big decision and not taken lightly,” explains Dominic Kailash Nath Waughray, the managing director of the World Economic Forum, via Zoom, from Switzerland. “It’s a very, very rare occasion.” The only other time the event was moved from Davos was after September 11, when the Forum was held in New York City, of all places, in November 2002. He hopes Davos will be back in January 2022.
What’s now called Davos Dialogues will be held virtually the same week in January as the physical Davos used to be. Waughray promises a similar combination of world leaders and corporate executives—he won’t say who other than that he’s had “confirmations” from “leading figures in the G7 and G20 economies”—talking about the economy, the environment, social justice issues, stakeholder capitalism, and, of course, COVID. (Waughray noted that President-Elect Joe Biden had been to Davos “five or six times” previously and knows the Davos “circuitry.”) He also says that the Forum executives had been holding the line on the price of attending events by promising more content and more ways to get that content for the same annual fee. “We’re not seeing a significant downturn in overall revenue,” he says, although some companies, such as those in the travel and tourism industries are cutting back on a “discretionary” spend such as Davos, while other companies in the technology, banking, and pharmaceutical sectors, which seem to be benefitting from the pandemic, are still paying up for the Davos content.
Then, in May, to continue to “project that confidence into the year ahead,” Waughray says, the World Economic Forum intends to have an in-person, “safe and secure,” smaller group of around 1,000 participants at the tony Bürgenstock Resort, on Lake Lucerne, in Switzerland. Waughray says the area is “one of the most beautiful parts of Switzerland, deliberately chosen to be extra nice at that time of year.” He says that while it is just too early to tell whether as many as 1,000 people will show up in May, the reaction so far to the announcement of the rescheduling and relocation of the event has “generally been pretty positive” but, he notes, reactions have differed sharply based on geography. “When you look at different parts of the world and different senses of optimism about a vaccine and such—I mean if you look at China or Russia and you look at Europe or the U.S.—you have maybe some different reactions,” he says.
There are two aspects of the Davos experience that are harder to replicate digitally. One, of course, are the flamboyant parties that take place at night and the chance encounters between the rich and powerful that occur on the pathways, in the breakout sessions or on the ski slopes. Waughray gets that. He says that by this point in the pandemic, people are more and more comfortable with Zoom calls and talking to others from their homes. He says the Forum has been experimenting with virtual “greenrooms” where panelists can meet and get to know one another and has tried to arrange for business leaders to meet digitally. “We’re working hard to create those sorts of moments,” Waughray says.
The media is the other essential ingredient to Davos. Cable business channels, such as CNBC, Fox Business, and Bloomberg, set up outposts in Davos in January, broadcasting continuously and hoping to break news with one leader after another once they’ve made the tough decision to appear on set wearing a Canada Goose parka, or not. “It’s not Davos without the media,” says Amanda Russo, the head of public engagement for the Forum, via Zoom. “It’s not. It’s a huge part of it. I can’t imagine a Davos without televised sessions, without interviews. People have a lot of questions they want to ask. And we want to find every way we can to let them ask those questions.” But my sources tell me, at the moment anyway, the business cable networks are wary of sending crews to Lucerne, in May, given that the pandemic is still raging in North America and in Europe. (Obviously, a successful deployment of vaccines could change that dynamic by May.) Russo remains hopeful the media will still play an important role in the Davos Dialogues in January and at the Lucerne event in May. “The [corporate] partners expect it,” Russo says of interaction with the media. “They want to communicate their messages to the press. The press wants to talk to people. We definitely view it as part of the experience.” As to whether Schwab has asked people not to suspend their memberships, Russo said that the organization regularly checks in with members and partners.