The World Economic Forum in the Swiss alpine resort of Davos, never a budget destination on the conference circuit, just got a whole lot more expensive.
The franc jumped at least 14 percent today after the Swiss central bank decided now was the time to stop capping its value. A dollar today buys a Davos delegate 88 Swiss centimes, down from 97 centimes a month ago.
That means a Johnnie Walker Blue at the Belvedere Hotel, the schmoozer’s hostelry of choice during the forum, would set you back the equivalent of $41 today for the 36-franc whisky, about $6 more than a nightcap yesterday. Across town at the Hotel Seehof, a bottle of 2004 Dom Perignon for those in a celebratory mood will cost about $400, up from $343 before the Swiss National Bank’s announcement.
“I’m glad I didn’t plan to stay a few more days to ski this year,” said Lin Boqiang, the director of the energy economics research center at China’s Xiamen University, who will be in Davos for the Jan. 21-24 get-together.
The franc’s sudden jump threatens to make an event that already costs a small fortune to attend more exclusive. The forum’s organizers are preparing to increase the annual fee for its top category of corporate membership to 600,000 francs in July, or $673,000 if you’re still counting.
That’s before attendees and their entourages worry about the cost of flights, meals, and hotels. The Belvedere said it charges 1,000 francs a night for a double room during the conference. The evening set menu at the Seehof’s flagship restaurant sets a diner back 135 francs, while sticking to a more modest burger in the bar would be 32 francs.
While the glittering cast ranging from philanthropist Bill Gates to International Monetary Fund chief Christine Lagarde are joined by billionaires like Mukesh Ambani, Michael Dell, and Alisher Usmanov, plenty of delegates are of more modest means.
Some, like Amnesty International Secretary-General Salil Shetty, hail from charities, others from cash-strapped governments. Those like Axel Springer AG Deputy Chairman Friede Springer help run companies that have sought to highlight efforts to curb the expenses of executives.
Switzerland was already one of the world’s most expensive countries, thanks to tight regulations and tariffs and high labor costs. Zurich, where most Davos guests first arrive, is the world’s fourth-most expensive city to live in, according to the Economist Intelligence Unit, just behind Oslo and well ahead of London and Moscow.
“We feel a bit shocked and a bit scared,” said Yvonne Wipraechtiger, managing director of Schneider’s, a cafe on the Davos promenade. “If you work in the export industry you could work with this, but in tourism it’s much more expensive now for everybody coming here.”
Other Davos businesspeople are trying to take the surge in the franc on the eve of the conference in their stride.
“All room rates and details have been negotiated beforehand, nothing is going to change about that,” said Peter H. Pedersen, the general manager at the Intercontinental Hotel in Davos. “However, for the time after Davos, the appreciation of the Swiss franc of course affects our competitiveness.”
His counterpart across town at the Belvedere said much the same. “At this point, it’s difficult to evaluate,” said general manager Thomas Kleber. “I wouldn’t expect our guests to spend less money.”
Davos attendees trying to keep the cost down do have at least one option. A grilled sausage with bread and mustard from the street-side stand by the main venue makes a hearty snack, and goes for about 8 francs, or $9.10. That’s only $1.25 more than it cost yesterday.
(An earlier version of this story corrected the spelling of the Hotel Seehof.)