How Hong Kong restaurateurs handle the ‘curse’ of the Michelin star

The prestigious seal of approval has been a boon for some restaurants, but a bane for others which have suffered the fallout from rent rises and customers’ unrealistic expectations

PUBLISHED : Wednesday, 04 May, 2016, 12:32pm
UPDATED : Wednesday, 04 May, 2016, 3:57pm

Lai Wai-hung is in an expansive mood. The founder of Hung’s Delicacies is gearing up to extend his group of Chiuchow eateries beyond the current three outlets in Hong Kong’s Kwun Tong district, Hong Kong International Airport and Macau.

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A branch is set to open in Changsha, Hunan province, China, next month, followed by another in a mall in Tuen Mun, in Hong Kong’s New Territories, next year. What’s more, there are plans to venture overseas to Taiwan and Thailand.

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Lai is clearly on a roll. He has been since 2009, when his original restaurant in North Point, Hong Kong, was awarded one star in the second edition of the Michelin Guide for Hong Kong and Macau.

“Only two budget eateries were awarded a star and mine was one of them,” he recalls (the other was Tim Ho Wan, a specialist dim sum restaurant in Mong Kok).

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Media clamoured for interviews and the publicity brought in crowds. “At the peak, diners had to wait for two hours,” Lai adds.

Known for its Chiu Chow-style braised meats, Hung’s Delicacies retained its Michelin star over the next four years and Lai began receiving overtures from companies hoping to get a slice of the action.

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“Many people asked to collaborate with us. Some offered several hundred million dollars [for a stake], but I knew such a deal would mean giving up decision-making power as they would hold the majority of shares,” Lai says.

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He eventually partnered with the Ideal Group in 2013 in a deal that gave him continued autonomy in running the restaurants while they split profits down the middle.

For the Ideal Group, the collaboration was part of its long-term diversification from zip production into property, entertainment and hospitality. The group has an eye to add Lai’s Chiu Chow dishes to the range provided in its hotels.

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Lai, on the other hand, got to rent premises owned by Ideal at slightly less than market rates – which is how Hung’s Delicacies moved to its current location, a 1,400 sq ft space in Kwun Tong where he is able to offer a much more extensive menu.

But the Michelin seal of approval can be a mixed blessing. It undoubtedly brings public attention and many more customers. However, after the initial euphoria fades, such recognition also ushers in challenges that can be the kiss of death for some restaurants.

In Hong Kong, this killing blow often takes the form of a spike in rent.

When Michelin launched its first Hong Kong street food guide this year, Cheung Hing Kee, a diner in Tsuen Wan selling Shanghai pan-fried buns, was among the 23 honorees.
Business went up, but so did the rent – the landlord raised the rent on its 400 sq ft shop by 30 per cent to HK$200,000 a month. Cheung Hing Kee’s owners were forced to close, although it later reopened in a much smaller space in Tsim Sha Tsui.

The guide was created more than a century ago by French tyre makers Andre and Edouard Michelin, initially as a directory of places to eat while on the road. But it soon evolved to become a bible of haute cuisine in France and later fine dining worldwide, now covering 24 countries. It also introduced the bib gourmand category for more modest restaurants, where diners can expect to pay no more than about HK$300 for a three-course meal (excluding drinks).

Despite competition from other restaurant rankings and criticism that the guide is snobbish and irrelevant to modern diners, ratings in the Michelin guide still have a powerful impact on restaurants, especially in the West.

Gordon Ramsay, the tough-talking British celebrity chef, told the Daily Mail in 2013 that he cried when his New York restaurant The London lost its two Michelin stars. The pressure associated with maintaining a Michelin star is so great that some chefs simply pull out – Skye Gyngell quit as head chef of the Petersham Nurseries Cafe in 2012, saying she did not like the expectations diners had of a Michelin-rated establishment. In January this year, Benoit Violier, the chef and owner of the three-Michelin-star Restaurant de l’Hôtel de Ville in Switzerland, committed suicide just before the latest Michelin list was released.

Conscious of the fallout from Michelin adulation, some Hong Kong restaurants have avoided the temptation of expanding quickly in favour of maintaining the quality of their food.

Ah Chun Shandong Dumpling, which has received a bib gourmand rating annually since 2013, is among them.

Food court managers invite them to open outlets and property agents tout spaces for new branches, but owner Wang Hong-chun rejects them all. “I don’t want to expand,” Wang says.

They make 2,000 dumplings every day by hand, and it is a process that cannot be replaced by machines in a central kitchen, he says.

Dumplings made with machines taste different because alkaline water and cornflour have to be added for the equipment to work the dough, Wang adds.

Kai Kai Dessert, which was included in this year’s Michelin street food guide, has also declined offers to set up a chain.

“Our shop is staffed by relatives and friends. So it’s a family business. The Michelin effect is huge, as it gives us a lot of publicity and business rose 30 per cent in the first month after the news,” says Chiu Wing-keng, who has been running the dessert business since his father retired.

They have received offers to franchise the business in China as well as to fund a chain of dessert shops in Taiwan.

“We don’t want to do all of those,” Chiu says. “My dad trained me for three years in the art of making [traditional Chinese] desserts before letting me take over. A change of chef would definitely affect the taste, so I won’t consider opening outlets until I have found people to train up as chefs.”

Such reservations over the stress and risks of expansion, however, aren’t shared by other Michelin-anointed restaurants such as Tim Ho Wan.

The dim sum joint in Mong Kok that was awarded a Michelin star in the 2010 Hong Kong and Macau guide has since opened four more outlets. More recently, it signed an agreement for Japanese catering group World Dining Inspirations to open franchised outlets in the US and Europe.

Lai of Hung’s Delicacies is thinking even bigger. “We have plans for a public listing,” he says.

Since the restaurant moved to larger premises in Kwun Tong, the menu has tripled from the original 30 items to 90 dishes. New offerings include oyster congee, oyster cake and desserts such as layered coffee pudding. They also introduced a line of cookies, including a shrimp and dried scallop biscuit, that may develop a new revenue stream.

“A businessman said he wants to build factories to produce and distribute the cookies in Southeast Asia,” Lai says. “We are still at the talking stage.”

But Lai’s expansionary efforts, including the setting up of a central kitchen in Kwun Tong to prepare ingredients, have drawn flak, with some saying that he is sacrificing quality for growth.

Lai brushes off the criticism.

“While we were in North Point, we had to close on Monday and Tuesday every week just to prepare the food. Now the central kitchen only helps with the early food processing stage, he says.

“People say my brand might suffer after expansion, but there’s no difference between then and now. The food is a bit more expensive, but diners are sitting in a much more comfortable and hygienic environment. ”

His restaurant has not retained its Michelin star since it opened in Kwun Tong in 2013; nevertheless, the chef continues to display a Michelin figure at the cash register.

“They are wrong in not giving me a star rating,” Lai says. “My restaurant has thrived wherever I go. Back in North Point, our eatery was on a quiet street where few people go, but our presence created a lot of traffic. Now in Kwun Tong, we are in a factory area far away from the MTR station. In spite of the remote location, our shop still has 20 to 30 people queuing to get in.”

In any case, Lai seems to thinking he no longer needs the approval of Michelin inspectors.

“I see many people close their businesses after they get a Michelin star.”