Bermuda's hotels have offered cheap rate rooms for the 1,000 passengers diverted to the Island following the terrorist attacks in the United States.

Members of Bermuda Hotel Association found about 600 rooms for passengers on six diverted US-bound flights which remained overnight.

A BHA memo to members states that the agreed rate with the airlines is $100 per night plus taxes and gratuities based on double occupancy.

The memo yesterday states: "It is strongly recommended that all guests who have been stranded here since yesterday and are unable to leave should be charged a significantly better rate than your rack rate."

BHA members are also urged not to charge a cancellation fee for any guests unable to arrive because of the flight ban in and out of the US.

The BHA set up a central booking bureau on Tuesday to collate all available rooms for the diverted passengers.

BHA president Billy Griffith said yesterday that hotels have responded well to meet the needs of the stranded passengers.

"I spoke to our central office today and things seem to be pretty calm in the hotels today. All the passengers appear to have been taken care of and there have been no major problems that I can tell," he said.