WEF summit seen as worth the trouble

The next World Economic Forum summit is likely to receive a warmer welcome swissinfo.ch

The annual meeting of the World Economic Forum brings more benefits than costs to Davos and Switzerland, according to a new study.

The study, carried out over a year and a half by University of St Gallen, follows years of speculation about exactly how much the annual meeting in the resort contributed to the Swiss economy.

It says that despite the costs, the summit is a lucrative business with strategic importance to the country.

Last year’s summit generated a turnover of SFr41.8 million ($28.07 million), with SFr22.7 million earned in Davos itself and the remainder in the rest of Switzerland.

Costs for the event, which over the past two years has become a focus of demonstrations against globalisation, were put at SFr11 million. These were mainly for security measures and borne by public authorities.

Years of speculation

Authors of the report were at pains to point out that the study was meant to show “open books” and transparency, and had nothing to do with the political fallout of violent demonstrations in Davos and Zurich in 2001.

This year, the annual meeting was switched to New York, mainly as a sign of solidarity after the terrorist attacks in the United States on September 11 and because of security concerns.

Commenting on the study, a director of the World Economic Forum, André Schneider, told swissinfo that he was glad that the speculation was over.

“I think we are very pleased first of all to see a report which puts some real facts behind some guessing which was happening over the last years,” he said.

“Naturally, we are also very pleased to see the level of importance we have economically and also on the image-building side for Davos, canton Graubünden and Switzerland,” he added.

Boost for hotels

The figures show, perhaps not surprisingly, that much of the turnover in Davos was generated in the hotel, and food and beverages businesses. Sales revenue outside the resort was mainly brought in by air transport.

One of the main authors of the report, Professor Thomas Bieger, told swissinfo that it was important that an exact figure for turnover was now available.

“It’s now up to the politicians to do the evaluation, taking into account the costs for the security system, as well as the benefits and costs on an emotional and political level,” he commented.

Intangible benefits

He also pointed out that the annual meeting had intangible benefits for the resort.

“All in all, Davos has a very positive image in the markets. Out of 710 people we asked, only 13 considered that Davos has a negative image, despite the fact that last year we had the problems with security and demonstrations,” he said.

“Sixty-three per cent of people we asked considered that the annual meeting of the World Economic Forum has a positive impact on the image of Davos overall,” he added.

His study came to the conclusion that although the annual meeting stimulated regular recognition for Davos as a congress location, more could be done using the World Economic Forum as a “flagship”.

It added that a stronger integration of the event could be used in the marketing strategy of the Davos tourist authorities.

Ambassador Eric Scheidegger from the Swiss State Secretariat for Economic Affairs in Bern told journalists that a net value of the WEF event had clearly been shown in the study.

Important for all of Switzerland

“The World Economic Forum has an importance for the whole of Switzerland. It also has to be mentioned that these figures should be considered on the conservative side… because they do not include the so-called intangible value of the WEF and this is extremely valuable to promote Switzerland as a location, he said.

In recent years, investment of some SFr50 million had been made in the local hotel industry, with further spending envisaged.

“The WEF is therefore a kind of motor for quality improvement – a role which in tourist regions is of particular importance,” he added.

Next year’s annual meeting of the WEF is definitely taking place in Davos, although there is plenty of speculation that other venues are being considered for future years.

“For 2003, we will be in Davos. Beyond that, I think we all want to give ourselves the time to see how it goes to define a commonly-accepted positive platform to do so,” WEF director André Schneider told swissinfo.

In a reaction to the study, the Bern Declaration development lobby group criticised it as “one-sided” because it mainly treated economic aspects. It added that this was not particularly forward looking.

The group is planning with other non-governmental organisations to hold meetings in Davos to coincide with the WEF annual event.

by Robert Brookes