Global Glance: Oct 19, 2015
A quick look at intriguing international stories
By John Bostwick, Managing Editor, Radius
Welcome back to Global Glance. This week we look at:
- Tipping in New York and around the world
- How instability can create opportunity in emerging markets
- Soho House’s successful international expansion
Tipping Practices in New York City Restaurants and Around the Globe
For most of us, Danny Meyer is the guy who created Shake Shack, the “better burger” joint that started as a hot dog cart in a Manhattan park in 2001 and has grown, according to its website, to include locations “from DUMBO to Dubai and Miami to Moscow.” Meyer is probably better known in New York City for his Union Square Hospitality Group, comprised of 13 high-end restaurants including Gramercy Tavern and Eleven Madison Park.
Meyer is acclaimed for the quality of his restaurants and for their emphasis on customer service. His latest move, however, may alienate some traditionally-minded diners who believe wait staff should be rewarded for good service and punished for bad. The New York Post reported last Wednesday that starting next month, “Meyer’s Union Square Hospitality Group will be instituting a no-tipping policy at the posh restaurant The Modern inside the Museum of Modern Art.” Menu prices will be hiked 21 to 25 percent, allowing Meyer “to raise workers’ wages — and make it possible for his restaurants to attract top talent.”
Depending on how the pilot program at The Modern goes, Meyer will implement the no-tipping policy at all his USHG restaurants by the end of next year. Given how influential and respected Meyer and his restaurants are, it will be fascinating to see if more US restaurants adopt the practice. Some industry professionals are skeptical. The New York Times also covered the story last week, quoting another New York restaurant owner as saying: “Tipping is a way of life in this country. … It may not be the perfect system, but it’s our system. It’s an American system.”
I’m not sure that tipping is strictly speaking an “American system.” Other countries of course have their own tipping practices, which can range from similar to those in US to nearly nonexistent. For a good, comprehensive look at global tipping, check out Conde Nast Traveler’s 2015 article “Etiquette 101: Your Guide to Tipping in 50 Countries,” which covers restaurant tipping and other scenarios like tipping hotel housekeepers and cab drivers. It points out that in some countries, discretion is expected along with a tip. Here’s a person familiar with Saudi Arabia tipping culture quoted in the article: “Put the tip in an envelope for guides and drivers, palm it off with a handshake and a thank-you to the concierge, and slip it in the jacket pocket of the maître d' to get a good table.” I can only imagine the kind of reaction I’d get if I tried to “slip” a tip into the pocket of a New York maître d'.
For another informative piece, check out The Guardian’s “Top Tips on Tipping around the World,” also published this year. Who knew that in Sweden, “hotel staff are likely to look bewildered if you offer them a tip for carrying your bags.” The lesson: If you’re traveling abroad for business or pleasure, research the tipping practices of your destination country or risk looking foolish (or worse).
Emerging Markets: How Instability Can Lead to Opportunity
The Harvard Business School (HBS) is publishing a series of interviews with business and nonprofit leaders from developing countries in Africa, Asia and Latin America. The series is called Creating Emerging Markets and addresses “pivotal moments of transition in the ever-evolving global world,” emphasizing “ways that businesses can create value for their societies.” The series also contains videos and other materials to foster global research and teaching. (Here’s the full interview list.)
The latest HBS interviews were promoted last week in a piece called “Does Business Get Done the Same Way in Emerging and Developed Countries?” The article is actually an interview with Harvard Professor Felix Oberholzer-Gee, who conducted the recent Emerging Markets interviews, with Turkish business leaders Hamdi Akin, chairman of Akfen Holding, and Rahim M. Koc, honorary chairman of Koc Holding.
Last week’s article addresses the fact that a 1980 Turkish military coup actually led to business opportunities for some, since former political “outsiders” suddenly found themselves on a more equal footing. Professor Oberholzer-Gee notes: “Many academics emphasize the benefits of stability. When we see wobbly political regimes or uncertainty in the law, we assume it is detrimental to business. … Turkey’s example provides a richer view: Yes, the change to a military regime undermines social capital and the rule of law. But, at the same time, the disruption is an opportunity for outsiders who found it more difficult to build businesses under the old regime.”
Soho House’s International Expansion Pays Off
If you’re like me, your vision of private clubs involves white-haired, blazered men drinking Scotch and ignoring the masses as they sit in wingchairs surrounded by lots of stained wood. And of course they’re in London.
In one sense, the appeal of clubs seems narrow. Then again, who doesn’t want to be part of an exclusive group? And clubs, like everything else, are changing. Consider Soho House, a company founded in 1995, not to cater to old money but to “those in the film, media and creative industries.” That last bit is from a 2013 (or 2012, it’s unclear) press release announcing the UK-based company’s plans to launch new Houses in Toronto, Mumbai, Chicago, Istanbul and Barcelona. Founder and CEO Nick Jones is quoted in the release as saying “the diversity of new members that join these future Houses will undoubtedly make a fantastic addition to our international community.”
Clearly, Soho House is not catering to the blue-blazer set. Seven of its 15 clubs are now located outside the UK. And as this GQ article last month explains, Soho House is mainly “home to an urban-dwelling creative class of people who can afford the dues (about 160 bucks a month) and have internalized the hyper-contemporary idea that a fulfilling life is exclusive of having a boss. They hope that Soho House might be a good place to host a meeting with a client or, better yet, an investor.”
Whatever the demographic, Soho House’s expansion plans have paid off. An article last Friday in The Evening Standard reported on the company’s swelling waiting list: “The numbers clamoring to join the chain’s existing 50,460 members rose 38% on last year to 30,500.” Jonas and majority-owner Ron Burkle (an American) plan to open Houses in “New York, LA, Malibu, Amsterdam and White City in London over the next two years.” From the pictures I’ve seen on the company website and elsewhere — which include rooftop pool decks and bikini-clad twentysomethings — not only will you do well to leave the blazer at home, but you’d better sign up for CrossFit classes.
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