Dubai-based Emirates, the largest Arab airline, said it will invest USD$253 million building a resort in the Seychelles, its second foreign hotel development and its biggest.

Emirates, which this year got Australian approval to build a hotel resort outside Sydney, aims to complete the 472 room Seychelles site at Mahe in 2010, the airline's president, Tim Clark, told reporters in Dubai.

"This is just the beginning," Clark said.

Emirates is considering locations in India, Sri Lanka and east Africa to build similar hotel resorts, capitalizing on its expanding network of destinations that stretch from Sydney to New York.

The Dubai government-owned carrier expects to recoup its Seychelles investment within eight to nine years, and achieve a 17 percent rate of return, Clark said.

Emirates is spending AUD$85 million (USD$70.5 million) on its Wolgan Valley resort in the Blue Mountains west of Sydney.

Emirates has a minority stake in Sri Lankan airlines which it manages.