India, Nov. 21 -- New York's dining scene was stunned this week when Michelin knocked Masa down from three stars to two. The high-end sushi counter at the Deutsche Bank Center - where the lowest-priced menu costs $750 before drinks - had held three stars for 15 years and was long viewed as untouchable. The change came as Michelin upgraded Sushi Sho, a newcomer that opened early last year, from two stars to three.

Industry insiders say the move could seriously affect Masa's business, especially since Michelin stars still drive decisions for wealthy diners from abroad.

One well-known restaurateur familiar with how Michelin ratings impact sales said the financial consequences could be significant. He explained to the New York Post that the...