A Hefty Price for Entry to Davos
What’s the price tag to be a Davos Man?
Chief executives, government leaders and academics around the world are headed to Davos, Switzerland, for the World Economic Forum’s annual meeting this week — a heady power gathering that mixes business, politics and Champagne in the Swiss Alps.
It is an event that draws a wide range of decision makers, from Jamie Dimon, the chief executive of JPMorgan Chase to Prime Minister George A. Papandreou of Greece to U2’s Bono, ostensibly to contemplate how to solve the world’s problems.
Of course, much of the week is really about one thing: networking.
As the “Black Swan” author Nassim N. Taleb described it to Tom Keene of Bloomberg Television, the event is “chasing successful people who want to be seen with other successful people. That’s the game.”
An invitation to the meeting is supposed to be considered an exclusive honor. But for corporate executives, the cost of being a Davos Man, or, yes, a Davos Woman, even for just a couple of days, doesn’t come cheap.
For the past week, I have interviewed more than a dozen C.E.O.’s and other executives who regularly make the pilgrimage to mingle at a high altitude in order to measure the true financial cost for corporations to attend the annual meeting.
But before we get to the fees for private planes, hotels, and a car and driver, there’s the all-important ticket. And it isn’t free.
Just to have the opportunity to be invited to Davos, you must be invited to be a member of the World Economic Forum, a Swiss nonprofit that was founded by Klaus Schwab, a German-born academic who managed to build a global conference in the snow.
There are several levels of membership: the basic level, which will get you one invitation to Davos, costs 50,000 Swiss francs, or about $52,000. The ticket itself is another 18,000 Swiss francs ($19,000), plus tax, bringing the total cost of membership and entrance fee to $71,000.
But that fee just gets you in the door with the masses at Davos, with entry to all the general sessions. If you want to be invited behind the velvet rope to participate in private sessions among your industry’s peers, you need to step up to the “Industry Associate” level.
That costs $137,000, plus the price of the ticket, bringing the total to about $156,000.
Of course, most C.E.O.’s don’t like going anywhere alone, so they might ask a colleague along. Well, the World Economic Forum doesn’t just let you buy an additional ticket for $19,000.
Instead, you need to upgrade your annual membership to the “Industry Partner” level. That will set you back about $263,000, plus the cost of two tickets, bringing the total to $301,000.
And if you want to take an entourage, say, five people? Now you’re talking about the “Strategic Partner” level. The price tag: $527,000.
(That’s just the annual membership entitling you to as many as five invitations. Each invitation is still $19,000 each, so if five people come, that’s $95,000, making the total $622,000.)
This year, all “Strategic Partners” are required to invite at least one woman along as part of an effort to diversify the attendee list.
As part of the strategic partner level, you get access to the private sessions as well as special conference rooms to hold meetings. And perhaps the biggest perk of all, your car and driver are given a sticker allowing door-to-door pick up service.
At the moment, the forum says they are not accepting applications to become “strategic partners” unless the company is from China or India and must be one of the 250 largest companies in the world.
In fairness, it is worth pointing out that membership at all levels doesn’t just get you access to the meeting in Davos, but also to at least a half-dozen other meetings held around the world. Membership also gives you access to the forum’s various research projects as well.
All those costs, of course, don’t include the travel-related costs of getting to Switzerland, schlepping around and perhaps holding a dinner or a cocktail party for clients (which is where the real action happens anyway.).
One large investor is renting a five-bedroom chalet this year just outside of Davos for himself and his staff. The cost? $140,000 for the week.
A car and driver, which the World Economic Forum will organize for you, is about $10,000 a week for a Mercedes S Class. A first-class fare from New York to Zurich is running at about $11,000.
But a private plane using NetJets will cost you about $70,000 round trip. Helicopter service from Zurich to Davos? $3,400 each way. (The forum provides a free bus service for those worried about their environmental footprint.)
Of course, many companies have dinners for clients, with dinners on multiple evenings for some firms. At the Posthotel, for example, the restaurant is charging a minimum of $210 a head.
A cocktail party for 60 to 80 people for just one hour? That costs about $8,000. Two hours? $16,000.
The bigger parties, like one that will be given by Google on Friday night for several hundred people, can run more than $250,000 for the evening. (In years past, Google has flown in the band and bartenders; one year, the company had an oxygen bar.)
All these embedded costs have helped make the World Economic Forum a big business — perhaps the biggest conference organizer in the world.
According to its annual report, it brings in about $185 million in revenue and spends nearly all of it, with almost half of its costs going toward events and the other half on personnel. But all this spending may soon be going out of vogue.
As one attendee, the author David Rothkopf, recently wrote on his blog, “The entire endeavor is fading for several reasons, all associated with the inadequacy of Davos as a networking forum.”
He explained, “As Steve Case, founder of AOL, once told me while standing at the bar in the middle of the hubbub of the main conference center: ‘You always feel like you are in the wrong place in Davos, like there is some better meeting going on somewhere in one of the hotels that you really ought to be at. Like the real Davos is happening in secret somewhere.’”