As a more direct "construction" of such a neighborhood one could proceed as follows.
Take any subarc $A$ of $\Gamma$ such that $z_0\in A$, but the endpoints $p,q$ of $A$ are different from $z_0$ (so $z_0$ is "between" $p$ and $q$ in $A$). Let $B=A\setminus\{p,q\}$ and $C=\Gamma\setminus B$. For each $b\in B$ let $U_b$ be the ball centered at $b$ of radius $\frac{d(b,C)}3$. Let $U=\cup_{b\in B}\,U_b$.
The verification that this works is easy, but here are some details. If $s$ is some point on the boundary of $U$, then there are sequences $s_n$ and $b_n$ such that $s_n\to s$ and $s_n\in U_{b_n}$.
Case 1. Some subsequence of the $b_n$ converges to an endpoint $p$ or $q$. Say without loss of generality $b_n\to p$. Then the radii of the balls $U_{b_n}$ converge to $0$ (since $p\in C$), hence also $s_n\to p$ and $s=p.$
Case 2. Some subsequence of the $b_n$ converges to some $b\in B$ (with $b\not\in\{p,q\}$). Without loss of generality $b_n\to b$. Then $s$ is on the circle which is the boundary of $U_b$ and the latter does not intersect $C$.
(So, the two intersection points could be prescribed in advance.)