Marriott International is to buy Starwood Hotels and Resorts for $12.2bn (£8bn) in a deal that will create the world's biggest hotel chain. If it receives regulatory approval, the acquisition will see the combination of 1.1 million rooms in more than 5,500 hotels and boost Marriott's presence outside the US market.

Starwood, which owns Sheraton hotels and earns more than 60% of its revenue from outside the US, said in April it was considering strategic alternatives.

Marriott International chief executive Arne Sorenson reassured investors and partners that the deal would improve the group's economics to owners and franchisees as well as generate unit growth and enhance long-term value.

"The driving force behind this transaction is growth," Sorenson said. "This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace."

The hotel industry has been suffering from low-cost alternatives to overnight stays including relative market newcomers such as Airbnb.