The Government's recent release of new guidelines on serviced apartments was welcomed by some industry participants who say it will sustain the quality of serviced apartments. Regal Riverside Hotel's general manager, Barry Yung Sai-bun, said the Government supported the restrictions on the serviced apartments in the light of some low-quality products in the market. Last month, the Government issued the guidelines on the definition of serviced units in a move to prevent developers building 'apartment-like' serviced flat projects. The Government would only allow 'hotel-like' serviced flats to be built. Under the revised definition, a serviced apartment is an establishment held under central management to provide residential accommodation with central air-conditioning. At least 75 per cent of the units in a serviced apartment project must be furnished studios or two-room units with a small pantry or kitchenette. The sizes of the units are expected to be between 430 square feet and 750 sq ft. Those restrictions were not stated in the board's previous definition. Under the new guidelines, the board may permit larger units or a higher proportion of units with more than two rooms in certain areas of the Central Business District where there is a cluster of grade A offices. The Government said serviced apartment projects should also be provided with communal facilities, such as dining hall, laundry, recreational facilities and housekeeping services. Mr Yung said the issue of the new guidelines was fair to the hotel operators who had spent a lump sum to upgrade the quality of suites for long- staying customers. His hotel spent millions of dollars for renovation or upgrading every year. Regal Riverside Hotel is one of the hotels in Hong Kong to provide serviced suites for long-staying customers. Tenants will have flexible leasing packages and a range of preferential offers such as discounts for the business centre service and covered car park. Some property consultants said the new guidelines could result in a higher development cost and trim the profit margins of serviced apartment projects due to a higher expenditure in installing central air-conditioning. It was reported that the new guidelines had resulted in some objections from developers. However, a senior executive of a developer said the revised guideline would not result in a significant increase in serviced apartment projects and developers would maintain interest in the sector as long as they could see profit margins.