Bali may become a more desirable destination for Australian tourists than Thailand if the Kingdom's political problems are prolonged, says Silachai Surai, director of the Tourism Authority of Thailand's Australia and New Zealand office.
Australian arrivals to Bali increased by 30% to 400,000 last year.
Continued political troubles could see Thailand lose its preferred position with Australians which it took from the Indonesian island in 2004.
"Bali is highly competitive and is cheaper at US$900 per trip compared to $1,000 a trip to Thailand," said Mr Silachai. "Travelling from Australia to Bali is just three hours. If Thai political instability continues, it's likely that we will lose to Bali."
Australians ranked fifth in terms of tourists coming to Thailand last year with 646,027 arrivals, a drop of 6.98% from the year before.
Thailand's political turmoil, including the seizure of Bangkok's airports and riots on the capital's streets, saw Australian arrivals fall far short of the targetted 700,000 arrivals.
Revenue from Australians was 34 billion baht last year down from 39.53 billion in 2008.
Bali ranked the fourth global destination for Australians until the bombings six years ago saw Thailand take the position with 393,040 arrivals that year, up 39.69% from 2003.
Australian visitors to Thailand rose to 421,594 in 2005 and 538,490 the year after.
This year Australian visitors to Thailand increased by 34.63% to 73,118 in January and up by 19.73% to 49,847 in February.
To maintain the average daily spending of 4,437 baht and average stay of 12.28 days, the Tourism Authority of Thailand plans to spend more than 40 million baht on advertising and marketing to the Australian market.
The TAT expects Australian visitors will reach 672,300 this year with 40 billion baht of revenue, and up to 692,500 with 45 billion baht of revenue next year.
The TAT will head a road show of 50 tour operators and hotels to three major cities in Australia - Oakland, Sydney and Melbourne - from May 10-13 to meet with 300 buyers in each city.
Mr Silachai said the agency also plans to spend 20 million baht on marketing programmes in New Zealand. It forecasts 90,000 arrivals from the country this year.
Arrivals from New Zealand dropped by 13.79% year-on-year to 78,452 last year. Tourists from the country spent an average of 3,979 baht per day and stayed for 12.39 days.
Peter Power, marketing manager at the TAT's Sydney office, said value-for-money packages and strong relationships with wholesalers will be key factors in boosting Australian arrivals. About 60% of Australian tourists make travel decisions based on information from wholesalers and online research.
"Australian tourists get information about Thailand from brochures distributed by wholesale travel agents. They are straight and want to get information about products and deals. However, different wholesalers have different contracts and different retail groups in their hand," said Mr Power,
Mr Power said it was important for tour operators not to offer cheaper rates online if they sell via wholesale or retail agents. They should keep in touch with customers and offer sale information, destination guides and fact sheets online.