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Does a Michelin star boost business?

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#1 Rail Paul

Rail Paul

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Posted 01 January 2011 - 07:44 PM

The WSJ has an article about the impact of Michelin stars on Hong Kong restaurants. There's definitely an increase in foreign tourist / business trade with a new single star. About 15%. There's also a demand for wine, which hasn't been a preferred beverage in some HK restaurants.

The star has also caused some restaurants to reposition their menus, creating or highlighting dishes that are perceived as "less local", so the shark fin soup disappears. Some restaurants seem concerned a star may scare off local regulars, who don't like foreigners taking over a place, or feel the place may now be too expensive

The loss of a star doesn't seem to have affected some places, though. Whether that is due to people using older books, or the restaurant making it to many more guidebooks, etc isn't covered.

But the mood at the restaurant is the “same as always,” says Sun Tung Lok’s executive director Victor Yuen, whose grandfather founded the 41-year-old establishment. In fact, no celebration is in the works yet. And on most nights, Mr. Yuen says a stable customer base of regulars keeps the seats filled.

“What has been new are the emails that we get from guests in other countries visiting Hong Kong,” says Mr. Yuen. “It’s the first time we see guests making advanced reservations in this way.”
In France, the Michelin Guide is regarded as a Bible of sorts for European restaurants. But it’s relatively new to Hong Kong, and it has yet to earn the same credibility for Chinese cuisine here. Local bloggers derided the most recent guide, as “random” for its choices, and many dismissed the guide’s previous two editions as too Eurocentric. Still, the books always inspire debate in Asia and otherwise unknown tiny noodle shops, such as Ho Hung Kee in Causeway Bay, would unlikely get the attention that a Michelin star can bestow.

So how helpful is a Michelin nod to boosting a Chinese restaurant’s business in Hong Kong?

At Ming Court, which received two Michelin stars in 2009 and 2010, there has been a noticeable rise in out-of-town guests and expatriates. Before the guide was published here, Ming Court catered mostly to locals, “with less than 5% foreigners,” says marketing director Katie Malone. “Last year, we saw that percentage jump to roughly 15%.”

The restaurant even developed a list of recommendations for Westerners selected from its regular menu. “It’s still authentic Chinese food, like five-spice pork, but we avoid things like shark’s fin or chicken feet,” Ms. Malone said. In addition, Ming Court also has a new 1,500-bottle cellar of 400 wine labels for its growing contingent of guests who prefer wine with their Chinese food. The extra business from the foreign clientele helped increase revenue by more than 20% in 2009 from the previous year.

If a new star in the Michelin Guide can help a Chinese restaurant reach a new audience, what might the loss of a star do?

According to Summer Palace, a Hong Kong restaurant in Admiralty District, which dropped from two to one star in 2009, there’s been no impact on business. On the contrary, reservations have grown by 20% year over year, the company says.

Star Power
“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones. ”
Niccolò Machiavelli