ONLY about a third of the territory's tourist guesthouses have been granted licences under new regulations designed to improve safety. Out of 538 known guesthouses, 196 have been issued with operating licences under the Hotel and Guesthouse Ordinance 1991 which came into effect on September 1. Under the ordinance, tourist guesthouses, such as those in Chungking and Mirador Mansions in Tsim Sha Tsui, must conform to basic safety and security standards. This includes having fire alarms, fire doors, extinguishers and better ventilation. The new rules were introduced after two tourists died in guesthouse fires in 1991. However, 21 owners are under threat of prosecution after orders were sent out forcing them to improve safety standards. Those who continue to operate face a maximum penalty of two years' jail, a $200,000 fine and an additional daily fine of $10,000 for each subsequent day's operation. The City and New Territories Administration has just completed inspecting all tourist guesthouses, a process which began in September. Inspectors found that 154 had ceased operation and 111 were still renovating to conform to the rules. The price of guesthouse accommodation in Hong Kong is continuing to rise. But the Hong Kong Tourist Association said it was better to have higher prices than unsafe accommodation.