JAKARTA - Australia is wooing Indonesians to spend their holidays Down Under and is working with Indonesian industry players, particularly in air travel and tourism agencies, to tap the South-east Asian nation's growing middle class.

The campaign comes despite souring diplomatic relations over the execution earlier this year of two Australians on drug charges and a row over illegal migrants.

But Tourism Australia's managing director John O'Sullivan sees Indonesia as a large and lucrative market.

"Indonesia is becoming more successful today and we are looking for more opportunities.

"It's an important market for us because of its proximity and its wealthy middle class. Potentially, by 2020, it could be an over A$2 billion (S$2.06 billion) market," Mr O'Sullivan told The Jakarta Post recently.

He said his office was working closely with Indonesia's national carrier Garuda Indonesia on various partnerships, including the offering of travel packages, which would encourage more Indonesians to visit Australia.

The number of Indonesian visitors to Australia has been increasing in the last few years, although the total numbers travelling there stay low compared with other Asian destinations.

About seven million international visitors travelled to Australia last year. Of those, the number of Indonesian visitors was 150,200, a 6.2 per cent increase on figures recorded in 2013. The figure also placed Indonesia as the 12th-largest inbound market for visitor arrivals to Australia.

However, the total spending by Indonesian tourists dropped despite the increase in the numbers. The total spending by Indonesians was only A$600 million last year, down 12 per cent compared with a year earlier.

"We are watching this (the decline in spending), but we don't see any alarm bells for the moment," Mr O'Sullivan said.

Apart from the partnership with Garuda, Tourism Australia will also try to penetrate the Indonesian market more with the help of travel agencies, particularly at the premium end of the market as well as speciality programmes, according to Mr O'Sullivan.

Ties between Indonesia and Australia have been strained this year over Jakarta's April execution of Australian drug convicts Andrew Chan and Myuran Sukumaran - a move that led Canberra to temporarily recall its ambassador from Jakarta.

A row over reports that the Australian navy paid a group of people-smugglers thousands of dollars to turn around their boat packed with asylum-seekers to Indonesia also added to the recent tensions.