Industry Update
Opinion Article19 August 2019

A Look At NEC’s Enterprise Solutions For Hospitality Businesses

A Tour of the NEC Future Creation Hub in Tokyo

By Linchi Kwok , Associate Professor at The Collins College of Hospitality Management

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I met with the hospitality team of the NEC Global Enterprise Solutions at NEC Corporation's headquarter in Tokyo last week. The team gave me a brief introduction of what services NEC provides and a tour of the NEC Future Creation Hub, an interactive showroom for the company's latest tech products.

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The trip to NEC's headquarter was, in fact, a follow-up visit after I met with the company's hospitality team at the HITEC 2019 in Minneapolis in June. Through a sneak peek of what NEC offers, I wonder whether the tech firms or the hospitality companies are the force that drives the transformation of the industry.

The traditional business solutions offered by NEC

NEC Corporation was established in 1899 as a telecommunication company, which later introduced the first PBX (private branch exchange) system in Japan. Even though PBX is not as crucial in hotel operations of today, NEC remains to be a top service provider in IP (internet protocol) communications for major hotel chains around the world.

Additionally, NEC also developed an integrated PMS (Property Management System) called NEHOPS for hotels in the 1970s. Today's NEHOPS is a cloud-based system that focuses on both customers' and employees' experience. More than 500 hotels in Japan, or 60 percent of the market share for upscale hotels, are now using NEHOPS.

NEC's new business solutions with facial recognition technology

NEC caught my attention at HITEC 2019 primarily due to its business solutions built upon the facial recognition technology. During this visit to NEC's headquarter, I was able to gain the first-hand experience with a few products that utilize facial recognition technology at the NEC Future Creation Hub.

"One ID" for airports and resorts

One ID allows airports and resorts to utilize travelers' biometric information for identification purposes. Using One ID, travelers can speed up the processes of security check and clearance of the custom at the airports. They can also skip the standard check-in process in hotels, as well as access their guestroom and other hotel facilities/outlets without a room key, a credit card, or any devices, a similar case shown in Alibaba's a futuristic hotel without human workers.

Narita Airport in Tokyo, for example, is expected to enable One ID by spring 2020, right in time before the 2020 Tokyo Olympics. Other major international airports in Japan, including Haneda Airport in Tokyo and Kansai Airport in Osaka, will also deploy the facial recognition system soon for custom baggage check and entry, as well as boarding at the gate.

Besides airports, NEC also works with airlines to speed up the check-in and boarding process with One ID, such as with Delta Airlines at the Atlanta Airport. More recently, NEC signed a partnership agreement with Star Alliance to provide travelers of the Star Alliance network the One ID experience.

Additionally, One ID has also been tested in a resort destination in Japan. In the case of Shirahama, a coastal, hot spring resort town located about 62 miles (100 kilometers) sound of Osaka, travelers can use One ID (also called IoT in this case) at the airport, hotels, restaurants, retail stores, and other tourist facilities in the area.

Retail stores with no staff

At the NEC Future Creation Hub, I also experienced NEC's concept retail store with no staff, similar to the Amazon Go stores in the U.S.

I firstly screened my face at the entrance (very likely, I also need to tie my One ID with a form of payment). Then, I entered the gate of the store that looked like a typical sub-way entrance in Japan. As I walked into the store, a customized advertisement popped up on the monitor next to the shell space. In my case, I was recognized as a middle-age, male customer, and the ad was about a cold bottled green tea.

I then picked the items I wanted from the shell. I walked towards the exit, where I placed the goods on the check-out counter. A screen on the counter showed me a list of the items I wanted to purchase with the price. If I did not want to make any changes, I would proceed with the payment on the screen through a screening of my face.

Compared to the Amazon Go stores, NEC's concept store requires one more step, where consumers must place the items on the check-out counter to process the payment. Nevertheless, I expect it will work well in the retail outlets located inside an office building that target the staff working there or a small marketplace in a hotel/resort.

I like the customized advertisement idea, but I am not sure if it works when many consumers with diverse backgrounds showing up in the store all at once. Moreover, I also encouraged the team to consider adding more variables to the algorithm, such as a consumer's racial information. In a hot summer day, for example, an Asian man might want to drink a bottle of tea from the fridge, but a European might want to drink a can of cold beer. In a cold winter afternoon, an Asian man might want to drink a heated bottle of tea, but an American might want to drink a can of hot cocoa or hot coffee. In another case, some consumers do not eat pork or beef.

At the NEC Future Creation Hub, I also observed some demonstrations of how facial recognition technology was used to track traffics or movements of the crowds in a public area. When the crowds are not moving as "usual" in a hallway (e.g., instead of walking at a normal speed on the left side - a custom in Japan, people suddenly ran away from a particular spot), an alert will be sent to the authorized personnel, asking them to check the place for accidents or any hazardous conditions.

Lastly, I also watched a few videos about the company's satellite systems. Besides the services in communications and broadcasting, NEC satellites also process the images about the surface of the earth and use the data for weather forecasting, climate changes, fishing and agricultural purposes, etc.

Many tech firms, such as Google and Amazon, are not positioned themselves as a hospitality or tourism company. Nevertheless, the services they provide to the industry are transforming how the hospitality businesses are operated.

I wonder who drives the transformation of the hospitality and tourism industry. Tech firms? The traditional hospitality companies, like Marriott or McDonald's? Or, must it come from both forces?

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Linchi Kwok

Linchi Kwok is an associate professor in The Collins College of Hospitality Management at California State Polytechnic University Pomona (Cal Poly Pomona). He came to Cal Poly Pomona by way of Syracuse University and Rochester Institute of Technology. He is a blogger and publishes refereed journal articles on service operations, information technology and social media.

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