The Tourism Association of Koh Samui (TAKS) forecasts the average hotel room rate on the island will remain stable until 2017 due to fierce competition and supply from illegal accommodation.
Rates have increased by 5% since last year, president Seni Puwasetthavorn said.
Many hotels must propose their contract rates for 2016-17 to clients by year-end.
“Room rates will not increase, but many hotels will offer special discounts to maintain clients,” Mr Seni said.
He said the number of illegal rooms on Koh Samui had doubled to 5,000 this year.
They include serviced apartments, weekend houses owned by foreigners, hotels and resorts.
C9 Hotelworks research shows 766 hotel rooms are under construction on the island, with 185 entering the market next year and the rest in 2017.
By 2018, Koh Samui will have 18,749 rooms at registered establishments, up by 4% from this year.
“The problem is worsening this year because weekend houses are playing with low prices,” Mr Seni said.
“They’re focusing on long-stay guests who pay 10 times less than the price of staying in hotels or resorts for more than a month.”
Mr Seni expects tourist arrivals on Koh Samui will grow by 10% to 1.6 million this year, while the average hotel occupancy rate will fall 15 percentage points to 50%.
Hotels with strong sales and marketing networks can run at 70-80% occupancy this year.
Hoteliers are concerned about advance bookings for the New Year holiday.
Only half the rooms have been reserved when they are usually fully booked by now.
“Many rooms remain available,” Mr Seni said.
“Tourists have changed their behaviour and now like to book at the last minute.”
He hopes Koh Samui airport, which has completed its expansion, will draw more tourists to the island.
Its capacity has risen to 50 flights a day from 34.
C9 Hotelworks said the airport received 252 non-scheduled flights in the first half of this year, a rise of 127% year-on-year.
The secondary gateway at Surat Thani airport recorded a slight decline of 1% year-on-year to 192 flights.
Most non-scheduled international flights arriving at Koh Samui and Surat Thani airports come from China.
The TAKS has joined with the Tourism Authority of Thailand and Bangkok Airways to organise roadshows in Hong Kong and Shenzhen to boost arrivals.
They believe the potential is good since the island’s visitor arrivals from Hong Kong and China are so low.
Mr Seni said these visitors had recorded dramatic growth to 70,000 this year from 10,000 in 2013.
These arrivals are expected to reach 100,000 next year.
Such tourists will be quality travellers, as tourism operators have been conscientious in resolving problems with zero-dollar tours, Mr Seni added.