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July 02, 2020 05:40 AM

Automakers will not miss hoteliers' high prices during Geneva show

Nick Gibbs
Reporter covering the UK market for Automotive News Europe
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    Geneva 2019 rtrs web.jpg
    REUTERS

    The Geneva auto show in 2019.

    The Geneva auto show was canceled in March making it the first major auto event that fell victim to the coronavirus pandemic. Lack of interest from automakers has led the Geneva International Motor Show Foundation to call off next year's event.

    The show's downfall will not be mourned by automakers, who have long grumbled about the price to attend global auto shows in general and Geneva in particular where hoteliers saw rich pickings among a captive market.

    Hotels charging high room prices and then forcing automakers to make a minimum booking of three or more nights even became known as the "Geneva disease" as the practice spread to other cities.

    An average price of 500 euros ($564) a night for a good hotel with a three-night minimum pushed up costs as brands sought accommodation for executives, support crews and guests. For hotels popular with set-up crews because of their proximity to the event, the minimum could be 14 nights, rising to 20 nights for 2019, one source said.

    The hotel prices were a relatively small portion of the average of about 5 million euros that it cost a large automaker to attend the Geneva show, but the matter was a sore point among executives, who felt they were being taken advantage of.

    "One of the biggest issues for manufacturers was the cost of hotels," said one automaker PR executive, who wished to remain anonymous.

    The Geneva show was Switzerland's biggest event generating around 200 million Swiss francs ($206 million) in income for the city, the Geneva State authorities said.

    It is such a money spinner that the state made staging it again in 2021 a condition of a loan designed to bail out the auto show organizers after the cancellation in March.

    The organizers turned down the loan.

    As news broke on Monday that the Geneva would not be held next March, some PR executives swapped stories of hotel nightmares.

    One former Renault executive remembers being 'gazumped' -- or kicked out of a booking -- because the hotel had found someone prepared to pay more.

    "I'll miss the show but having dealt with the greed of Geneva hoteliers over several years I'm finding it difficult to be sympathetic with their plight now," the executive said.

    One of the show's big draws is its proximity to Geneva airport and good travel links to the city. But for those not prepared to pay exorbitant hotel fees, getting around was not so easy.

    After getting kicked out of a hotel booking, Kia UK ditched the city altogether and accommodated its executives and guests in Lausanne, a 45-minute train ride away.

    Another popular option was staying just across border in France, which meant hotel costs were lower but increased attendees exposure to Geneva's terrible traffic.

    It was hard to find a balance.

    A former public relations executive at the UK's Rover Group, Michael Gould, remembers using the French option in the company's cost-cutting era.

    "Our best Rover Group ruse was to stay over the border and get bussed in. When Ford bought Land Rover, we were told to 'think like winners' and we installed in the [upmarket] Moevenpick hotel," he said on Twitter.

    Another story told anonymously concerns a finance chief who, on seeing the Geneva hotel bill one year, demanded much cheaper accommodation the following year.

    Rooms were secured fairly centrally with one small problem: the hotel was right in the middle of the red-light district. The company's CEO was not happy. "Emails flew to the CFO almost instantaneously," the source said. "It was the last time they stayed in a cheap hotel."

    Geneva is not the only show with cost problems. Stories from other shows include stand builders whose hourly rate climbs up to eight times the norm the later into the night they work. One show also developed a reputation for the disappearance of expensive stand food.

    Geneva was already suffering as more automakers decided to cut auto shows from their annual budgets, but the attrition rate was not as high as other events such as Frankfurt and Paris.

    With coronavirus hastening the shift to far cheaper online reveals, Geneva could be facing the same level of threat without a significant rethink.

    The answer could even include switching to holding it every two years.

    "For me at the moment all the options are open," the show's director general, Sandro Mesquita, told Automotive News Europe in May. "We still would like to stay an annual show but there is no taboo. Everything needs to be rethought."

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