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The Michelin Guides Lose $24M a Year

michelin-man-of-doom.jpgThe Financial Times has a pretty epic 2,700 word piece on the tough situation the Michelin Guides are in. Currently losing over $24 million a year, the guide is projected to lose $30M in 2015. Restaurants awarded stars, meanwhile, can see a boost in business of up to 25%.

As part of the Michelin tire company (the company had net sales of $8 billion Q1 2011), the guide's losses are just a drop in the bucket. And Michelin does say that "when taken together, the maps, guides and digital businesses are profitable," but losses on the side of the guides (with no end in sight) means trouble. And belt-tightening: Guides in Austria, Los Angeles, and Las Vegas were shuttered; headquarters were relocated from the charming 7th arrondissement to the suburbs outside of Paris.

It was suggested that the guides get shut down, but that idea was rejected, "partly in recognition of the undoubted brand value of the guide but also because of the political impossibility in France of such drastic action." Also, chefs would riot.

So now what? The guide's online strategy has not been so successful, some might say irrelevant. Consultants have been brought in who have suggested going the online "services" route with "paid-for links" for hotels and restaurants to allow "users to make online reservations."

But for now, the status quo: The company's 90 anonymous inspectors continue to eat, the starred restaurants take the boost in business, and the guide continues to burn money.

Star-crossed [Financial Times]
· All Michelin Coverage on Eater [-E-]
[Photo: Matt Callow/Flickr]