Koh Samui’s Build-to-Rent Villa Market Booms Amid Rising Demand for Vacation Rentals

Private Villas for Vacation Rentals Become a Major Segment of Tourist Accommodation in Samui

Freestanding villas in Koh Samui are increasingly emerging as a viable alternative to the island’s traditional hospitality options, driven by the ongoing expansion of the tourism sector. As the demand for multi-bedroom accommodations grows, particularly among travelers who value privacy and space, these private villas are becoming a popular choice. According to C9 Hotelworks’ latest Samui Villa Rental Market Review, this shift is accelerating the development of build-to-rent (BTR) villas, attracting significant interest from real estate investors.

The resurgence of tourism in Samui has been largely fueled by domestic travelers, with the island experiencing nearly 70 percent year-on-year growth. This upward trend is set to continue with the entry of Scoot Airlines from Singapore, along with the introduction of additional new routes, which are expected to bring more regional upscale travelers to the island. Notably, Scoot’s connectivity to long-haul flights from Europe, North America, and Australia via its parent company, Singapore Airlines, is likely to further boost international arrivals.

In recent years, the rental of private villas as vacation homes has emerged as a substantial segment of tourist accommodation in Samui. Platforms such as Airbnb have played a pivotal role in this market, offering a wide range of options from midscale to luxury properties. In the luxury segment, independent management companies and a select number of local groups have become key players, catering to guests who require not just a place to stay but also a full suite of management and concierge services.

Our research indicates that well-managed properties tend to perform better, as the expectations of villa travelers extend beyond the basic bed-and-breakfast model offered by most hotels. This has led to an increase in the number of management companies with a strong local presence, which are crucial in navigating the competitive landscape of informal hospitality offerings. These companies leverage brand recognition to attract clientele, driving higher rental turnover and rates, while also maintaining better cost control. However, the operations of these properties are increasingly challenged by a shortage of skilled manpower.

As the post-COVID era sees a surge in villa developments driven by growing family demand on the island, many of these properties are struggling with a lack of professional management and standardized product offerings. Owners often prioritize visual appeal and low rental rates as their primary sales strategies, particularly in inland hillside areas where investment costs are lower. This has led to rate pressure in these inland properties, although premium beachfront villas remain largely unaffected due to the limited inventory of oceanfront and sea view properties.

According to data from AirDNA, there are currently around 5,800 holiday rentals available in Samui. With favorable returns, investment in the upscale build-to-rent villa sector is on the rise. However, recent regulatory crackdowns by the Thai government on the use of Thai nominees and the registration of properties under Thai companies are likely to drive overseas investors toward the well-established long-term lease structure for land ownership, rather than setting up local companies.

Looking ahead, we anticipate growth in the resale market for existing properties in Koh Samui, spurred by a global flight to real estate assets and increased cross-border migration. Thailand’s well-defined Thailand Elite program, retirement visa, and other initiatives continue to serve as key catalysts for this trend. In terms of land values, while markets like Phuket have seen prices soar, land in Koh Samui remains moderately priced, making it an attractive option for property development in the short to mid-term.