Hurricane Sandy will likely cause financial headaches for US airlines that canceled more than 7,000 flights to and from the Northeast corridor on Sunday.

Hotels in the region were busy handling cancellations for guests who could not get to destinations in the Northeast, extending stays for guests who could not leave town, and booking rooms for people who left their homes.

Airlines started canceling flights in the US Northeast region Sunday evening as cities from Washington DC to Boston braced for floods and high winds from the hurricane, which was expected to make landfall in the next few days.

According to flightaware.com, more than 7,100 flights had been canceled by 9 pm on Sunday due to Sandy. Airlines waived fees for people who have to change travel plans because of the grounded flights.

In New York City, the timing of flight cancellations like those of US Airways was determined by the city's decision to start shutting down its mass transit systems at 7 pm as passengers would have no way to get to and from the airport.

US Airways said it would likely have to cancel close to 2,000 flights because of the storm, starting at 7 pm Sunday. The airline said it expects to resume flights on Tuesday, but noted that flooding and the storm's duration could cause additional delays.

Transportation consultant George Hamlin estimated that Sandy could cost the industry hundreds of millions of dollars.

"It's a disruption in terms of extra costs," Hamlin said.

On top of lost flight revenue, airlines will likely have to pay their crew extra if they are stranded away from their home base.

"If you cancel a day or two's flights, it may take some people days to get to where they want to go," he said.

Meanwhile the reservation desks at Starwood Hotels & Resorts Worldwide Inc, which operates hotels such as Westin, Sheraton and Marriott International Inc hotel groups, said they had a busy day.

"I've had a lot of calls about New York properties today, a lot of people who are canceling, a lot of people who come here because we have generators," a Starwood reservations employee said.

"People are really just frightened of the storm ... they're frightened of water levels and they're frightened of losing power and they want to be somewhere where they're safe," the employee said.

A reservations worker for Marriott said her work day had been "really crazy" with all the calls for cancellations and last-minute reservations, including calls from corporations booking blocks of rooms for their employees.

Reuters