Marriott International is buying rival hotel chain Starwood for $12.2 billion in a deal that will secure its position as the world's largest hotelier, the Associated Press reports.

The stock-and-cash deal, if completed, will add 50 percent more rooms to Marriott's portfolio and give it more unique, design-focused hotels that appeal to younger travelers.

The new company would have 5,500 properties with more than 1.1 million rooms around the world, uniting Starwood's brands, which include Sheraton, Westin, W and St. Regis, with Marriott's two dozen brands including Marriott's Courtyard, Ritz-Carlton and Fairfield Inn.

Back in April, Starwood announced its board was exploring strategic options for the hotel company. The Stamford, Connecticut, company has struggled to grow as fast as its rivals, particularly in "limited service hotels," smaller properties which don't have restaurants or banquet halls. They are often located on the side of the highway, near airports or in suburban office parks.

There was speculation in the markets about a potential deal with Holiday Inn owner Intercontinental Hotels Group and more recently Hyatt Hotels Corp. But in the end, it was Marriott who prevailed.

The deal comes at a time of record hotel occupancy and rates.