<PAGE>   1
===============================================================================
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                -------------

                                  FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997         COMMISSION FILE NO. 0-23536

                                -------------

                         SUPERTEL HOSPITALITY, INC.
           (Exact name of registrant as specified in its charter)

           DELAWARE                                    47-0774097
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation of organization)

       309 NORTH 5TH STREET
         NORFOLK, NEBRASKA                                68701
(Address of principal executive offices)               (Zip Code)

     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (402) 371-2520

      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                   COMMON STOCK, PAR VALUE $.01 PER SHARE

                                -------------

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that
the registrant was required to file such report(s), and (2) has been subject to
such filing requirements for the past 90 days. Yes  X   No
                                                  -----
     The number of shares of common stock  outstanding  as of March 13, 1998
was 4,840,000 shares.  The aggregate market value of the common stock held
by non-affiliates of the registrant as of March 13, 1998 was $32,508,000.

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form  
10-K or any amendment to this Form 10-K. [  ]

     Documents incorporated by reference include portions of the Company's
Annual Report to Stockholders for the year ended December 31, 1997 ("1997
Annual Report") incorporated by reference into Parts I and II, and portions of
the Company's Proxy Statement for the May 1, 1998 Annual Stockholders' Meeting
("1998 Proxy Statement") incorporated by reference in Part III.

===============================================================================


<PAGE>   2



                                   PART I
ITEM 1.  BUSINESS.

GENERAL

     Supertel is one of the largest franchisees of Super 8 motels based on
the number of motels owned and total rooms rented.  The Company develops, 
acquires, constructs and operates economy-class motels as a franchisee of
Super 8 Motels, Inc. and at February 1, 1998 owned 57 Super 8 motels located
primarily in Nebraska, Kansas, Iowa, Missouri, Arkansas, Wisconsin and Texas. 
Supertel is one of the few multiple-location franchisees of Super 8 motels 
that both owns and operates motels.  Supertel also owned two Comfort Inn 
motels, one River Valley Suites motel, and two Wingate Inns at February 1, 1998.

     On March 18, 1998, Supertel announced that it was engaged in discussions  
regarding a possible business combination with a publicly-traded
company pursuant to which Supertel stockholders would receive cash and common
stock of the other company.  Supertel stated that completion of a definitive
agreement and consummation of a transaction are subject to a number of
uncertainties, including results of due diligence by both companies, and would
be subject to approval by Supertel's board of directors and stockholders.
Supertel further stated that there can be no assurance an agreement can be
reached, or that if an agreement is entered into, that any transaction will be
consummated.

     CURRENT OPERATIONS.   Supertel is a vertically-integrated motel 
construction, development and operations company that (i) identifies    
potential sites for the construction of new motels and analyzes existing
motels that are available for acquisition, (ii) develops and constructs new
motel properties and renovates existing motels it acquires and (iii) 
manages its own motel properties.  Certain historical information concerning
Supertel's operations is set forth in the following table.

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------
  YEAR-END INFORMATION       1993          1994         1995           1996          1997
---------------------------------------------------------------------------------------------
<S>                      <C>           <C>           <C>           <C>            <C>
Number of Motels                  36            41            48            59             62
---------------------------------------------------------------------------------------------
Total Rooms Rented           603,367       667,545       793,151       903,643      1,041,904
---------------------------------------------------------------------------------------------
Motel Revenues           $21,603,000   $25,161,000   $31,362,000   $37,832,388     46,344,815
---------------------------------------------------------------------------------------------
ProForma Net Income
After Taxes              $ 2,142,000   $ 3,077,000   $ 3,624,000   $ 3,371,247      4,101,665
---------------------------------------------------------------------------------------------
Average Occupancy Rate          70.5%         69.4%         69.6%         65.7%          65.7%
---------------------------------------------------------------------------------------------
Average Room Rate (1)    $     35.80   $     37.69   $     39.54   $     41.87    $     44.48
---------------------------------------------------------------------------------------------
</TABLE>

     (1)  Includes telephone, vending and movie revenues.


                                     -2-


<PAGE>   3



     HISTORY.  Paul J. Schulte and Steve H. Borgmann developed their first
Super 8 motel as a franchisee of Super 8 Motels, Inc. in 1978. From 1978        
through October 1990, Messrs.   Schulte and Borgmann developed by 
acquisition or construction an additional 26 motels in the states of Nebraska, 
Iowa, Missouri, Kansas and Arizona through a series of limited  partnerships 
and corporations. These various entities were combined into Spartan "8"
Limited Partnership ("Spartan") in October 1990.  Messrs.  Schulte and 
Borgmann continued as the general partners of Spartan which acquired or
developed nine additional motel properties in Nebraska, Kansas, Missouri and
Arkansas between October 1990 and February 1994.

     Simplex, Inc. ("Simplex") has been involved in the motel management
business for Spartan and its predecessors since 1980. Motel Developers, 
Inc. ("MDI") or its predecessors have acted as a general contractor for
motel properties developed by Messrs.  Schulte and Borgmann since 1977. 
Supertel was organized in December 1993 to act as the successor to businesses 
operated by Spartan, MDI and Simplex, at which time Simplex and MDI became
wholly-owned subsidiaries of Supertel. Supertel completed an initial public
offering in April 1994.  Spartan, MDI and Simplex are sometimes referred to as
the "Predecessor Companies". The narrative description and financial information
herein have been prepared as if Supertel owned and operated the properties
throughout the periods described herein.

LODGING INDUSTRY OVERVIEW

     The lodging industry can be divided into four broad segments based on
price and chain affiliation. These segments are: upscale, midscale, economy,    
and small chains or independent motels.  Each of the first three categories
are further divided into two subcategories based on price: upper and lower.
Super 8 motels are in the lower economy segment, together with Motel 6,
Budgetel, Ramada Limited, EconoLodge, Roadway Inn, Sleep Inn and others.
Wingate Inns are in the upper midscale segment, together with Hampton Inns
and Courtyard by Marriott.

     Lower economy-class motels appeal to family, senior citizen and business 
travelers seeking comfortable lodging at low cost.  Supertel believes the 
geographic location and cost structure of its economy motels results in
higher margins than are obtained in other segments of the lodging industry.
Upper mid-scale hotels appeal to the business traveler looking for extended
benefits.

Motel Operations

     Supertel's Super 8 motels are economy lodging facilities containing
between 40 and 135 guest rooms.  The guest rooms contain between 220 and        
290 square feet of space and are furnished with either king or queen size or
two double beds, dresser, table and chairs or recliner and a remote controlled
color television (frequently with cable or satellite hook ups).  The motels
provide continental breakfasts, wake up calls and 24-hour desk service.  



                                     -3-

<PAGE>   4

The typical motel is of an English-tudor style design and is located near
restaurants operated by third parties.

     Supertel's personnel have extensive experience in conducting site
selection.  Site selection typically consists of reviewing area 
demographics, conducting market research and comparing the proposed site to
other potential expansion locations.  The Company acts as its own general 
contractor in constructing Super 8 motels.  In the conduct of general 
contractor duties, Supertel's personnel purchase building materials and 
award contracts for plumbing, concrete, concrete finishing, electrical,  
heating and air conditioning, carpentry, finish carpentry and specialized 
equipment such as computer equipment and telephone equipment.

     Each of Supertel's 62 motels has an on-site manager.  The manager is
generally a resident of the local community.  Supertel management is in 
daily contact with each motel manager. Supertel's motels with 80 or fewer rooms
employ an average of 12 housekeeping and maintenance employees and its motels
with more than 80 rooms employ an average of 16 housekeeping and maintenance
employees.

     Supertel's training personnel conducts training of all motel staff
members including motel managers, motel desk clerks and motel housekeepers.
Supertel's employee training emphasizes its guest safety programs which 
include room key control, outside lighting and security cameras for monitoring 
motel premises.

CUSTOMERS AND MARKETING

     During 1997, the Company rented 1,041,904 rooms. Over 67% of its guests
were members of the VIP Club, a popular guest program developed by Super 8 
Motels, Inc.  The members of the VIP Club receive room discounts upon 
presentation of their club card at check-in and check cashing privileges in 
addition to other benefits.  Supertel's marketing efforts include VIP Club 
enrollment drives and VIP enrollment contests among desk clerks.

     Supertel's marketing efforts also include negotiating and renewing
billboards and developing and renewing yellow page advertising. Specific        
on-site marketing sales programs for individual motels are implemented and
planned by Company personnel.  In addition, Supertel participates in various
community campaigns in support of the local area at each motel location.





                                     -4-



<PAGE>   5




SERVICE AND QUALITY ASSURANCE

     Supertel believes it ranks among the best Super 8 motels for quality
and service.  Super 8 Motels, Inc. conducts surveys of guests of Super 8 motels 
through the use of in-room guest comment cards. Guests are requested to
complete and mail the self-addressed cards to Super 8 Motels, Inc. following a
stay in a Super 8 motel. The comment card covers nine areas: appearance, room
cleanliness, room comfort, room furnishings, bathroom, price value 
perception, employee friendliness, employee efficiency and employee response. 
The following chart reflects the average guest responses on the Super 8 
surveys, which use a scale of 1.00 to 4.00 with the best score being 1.00.

<TABLE>
<CAPTION>

                               1995             1996             1997
                               ----             ----             ----
<S>                            <C>              <C>              <C>
All Super 8 motels             1.43             1.41             1.38
 .................

Supertel-owned motels          1.17             1.15             1.14
 .................

</TABLE>

     Super 8 Motels, Inc. also conducts four unannounced inspections of each
motel per year, one each quarter.  The inspection scores shown below are        
the average for the year.  A score of 0 to 50 is graded as excellent, 51 to
300 is graded good, 301 to 500 is graded average and above 500 is graded
unacceptable.

<TABLE>
<CAPTION>
                                         1995             1996             1997
                                         ----             ----             ----
<S>                                       <C>              <C>              <C>
All Super 8 motels .................      173              187              180
Supertel-owned motels (all motels)..       52               61               65
Supertel-owned motels (properties
  owned/opened more than one year)..       38               61               65

</TABLE>




                                     -5-


<PAGE>   6



MOTEL PROPERTIES

     Certain information for the 62 motels owned by Supertel at February 1,
1998 is set forth below. All motels are Super 8 motels except as noted.

<TABLE>
<CAPTION>

LOCATION                               DATE OPENED              ROOMS IN MOTEL
--------                               -----------              --------------
<S>                                    <C>                            <C>
NEBRASKA
--------

     Columbus                          12/31/81                        63
     O'Neill                           7/30/82                         53
     Omaha                             2/18/83                        116
     Lincoln                           purchased 8/1/83                83
     Lincoln                           10/29/83                       135
     Omaha                             5/23/86                         74
     Wayne                             6/8/92                          41
     Omaha                             12/29/93                       101
     Norfolk                           purchased 11/2/94               66
                                                                      
IOWA                                                                  
----
                                                                      
     Creston                           9/19/78                         84
     Keokuk                            2/2/85                          62
     Iowa City                         12/21/85                        87
     Oskaloosa                         12/31/85                        51
     Burlington                        12/30/86                        63
     Clinton                           1/25/88                         63
     Mt. Pleasant                      8/29/88                         55
     Pella                             3/15/90                         41
     Storm Lake                        10/11/90                        59
     Muscatine                         purchased 1/4/95                63
     Ft. Madison                       purchased 1/4/95                42
                                                                      
KANSAS                                                                
------
                                                                      
     Hays                              5/31/87                         78
     Pittsburg                         8/14/87                         64
     Manhattan                         11/23/87                        87
     Wichita                           2/17/89                        120
     Lenexa                            12/22/89                       101
     Garden City                       purchased 6/1/91                61
     El Dorado                         1/16/92                         49
     Wichita                           purchased 11/7/94               60
     Parsons                           purchased 3/15/96               48

</TABLE>


                                     -6-



<PAGE>   7


<TABLE>
<CAPTION>

LOCATION                               DATE OPENED              ROOMS IN MOTEL
--------                               -----------              --------------
<S>                                    <C>                            <C>
MISSOURI
--------

     Kirksville                        8/28/86                         64
     Sedalia                           3/6/87                          87
     Moberly                           purchased 8/1/87                60
     Marshall                          5/6/88                          54
     Kingdom City                      6/6/89                          62
     West Plains                       11/5/90                         49
     Jefferson City                    7/2/91                          80
                                                                      
TEXAS                                                                 
-----
                                                                      
     College Station                   6/21/94                         90
     Waco                              6/21/94                         78
     Irving                            2/10/95                        104
     Plano                             10/3/95                        102
     McKinney                          12/21/95                        80
     Denton                            4/11/96                         80
     Wichita Falls                     6/4/96                         104
     Grapevine                         6/4/96                         102
     Bedford                           8/15/96                        114
     Los Colinas (Wingate Inn)         4/1/97                         101
     Houston (Wingate Inn)             8/22/97                        101
                                                                      
SOUTH DAKOTA                                                          
------------

     Watertown                         purchased 7/15/94               58
                                                                      
ILLINOIS                                                              
--------
                                                                      
     Macomb                            purchased 1/17/95               41
     Jacksonville                      purchased 3/22/95               43
                                                                      
ARKANSAS                                                              
--------
                                                                      
     Russellville                      3/21/91                         63
     Mountain Home                     4/13/92                         41
     Batesville                        10/6/92                         49
     Fayetteville                      5/17/93                         83
</TABLE>                                                                      
                                                                      
                                     -7-



<PAGE>   8


<TABLE>
<CAPTION>

LOCATION                               DATE OPENED              ROOMS IN MOTEL
--------                               -----------              --------------
<S>                                    <C>                            <C>
ARIZONA
-------

     Bullhead City (Independent)       4/28/84                         76
                                                                       
WISCONSIN                                                              
---------
                                                                       
     Portage                           purchased 6/13/96               61
     Antigo                            purchased 7/2/96                52
     Shawano                           purchased 7/2/96                55
     Minocqua (Comfort Inn)            purchased 7/2/96                51
     Sheboygan (Comfort Inn)           purchased 7/30/96               59
     Tomah                             purchased 8/14/96               64
     Menomonie                         purchased 4/1/97                81
                                                                     -----  
                                                                     4,459
</TABLE>


                                     -8-

<PAGE>   9



RELATIONSHIP WITH SUPER 8 MOTELS, INC.

     Supertel's motel properties are each operated pursuant to a franchise
agreement with Super 8 Motels, Inc. Super 8 Motels, Inc., with corporate        
offices located in Aberdeen, South Dakota, is a subsidiary of Cendant 
Corp., a publicly-owned franchisor of hotels and motels, including Days
Inn, Howard Johnson, Knights Inn, Ramada, Travelodge, Villager Lodge, Wingate
Inn and Super 8. There were 1,617 Super 8 motels operating as of December 31,
1997.

     BENEFITS TO SUPERTEL.  Supertel's franchisee relationship
allows the use of the nationally recognized service mark "Super 8"
in its motel operations.  Super 8 Motels, Inc. conducts national
print and media advertising promoting the service mark and Super
8 motels.  Quality and consistency among Super 8 motels is
monitored by Super 8 Motels, Inc. through four unannounced annual
inspections of each Super 8 motel for compliance with facility and
service standards.  Super 8 Motels, Inc. also assists franchisees
in advertising, design and development, market research and trade
show participation.

     Super 8 Motels, Inc. operates a 24-hour reservation system.  Travelers
can use an 800 telephone number through the reservation system to reserve       
rooms nationwide at Super 8 motels.  In addition to the reservation 
service, an international directory of Super 8 motels is published twice
annually and Super 8 Motels, Inc. prepares and delivers a special directory 
for tour groups to travel agencies.

     Members of Super 8 Motels, Inc.'s VIP Club program rented over 67% of
Supertel's motel rooms during 1997.  The 5,035,265 members of the VIP   
Club receive room rate discounts upon presentation of their club card at
check-in and check cashing  privileges in addition to other benefits.  Super 8
guarantees any losses that Supertel may incur from checks written by VIP Club
cardholders.

     Super 8 Motels, Inc. provides Supertel with a central source for
purchasing of items used in the motel operations.  The Company believes 
that volume purchasing from a central source results in overall lower purchase
costs. As a franchisee of Super 8 Motels, Inc., Supertel also receives rebates
on long distance telephone charges and premium television charges through its 
relationship with the franchisor.

     FRANCHISE AGREEMENTS.  Supertel pays a monthly franchise fee ranging
from 4% to 7% of each motel's gross receipts from room revenues of which 1%     
to 3% is contributed to an advertising fund administered by Super 8 Motels, Inc.
to finance its 


                                     -9-


<PAGE>   10



national advertising program. An initial franchise fee of $20,000 is required 
upon the execution of a franchise agreement for a new location.

     Super 8 Motels, Inc. has agreed not to franchise additional Super 8 motels 
within a specific radius (which varies from five to thirty miles depending  
upon the location) of each motel.  Each franchise agreement has a twenty
year term.  Super 8 Motels, Inc. has the right to terminate a franchise
agreement, subject to the Supertel's right to correct the condition giving rise
to the right to terminate, if Supertel violates the agreement, becomes
insolvent, or permits an attachment or execution to be levied on the subject
motel.

     Supertel may own and operate motels not subject to a franchise agreement  
with Super 8 Motels, Inc.  In addition, in the event a franchise agreement 
with respect to a motel is not renewed or is terminated, Supertel may
operate such motel independently or pursuant to an agreement with another
franchisor while continuing to operate its other motels under franchise
agreements with Super 8 Motels, Inc.

     AREA DEVELOPMENT RIGHTS.  Super 8 Motels, Inc. has granted Supertel
exclusive rights to develop motels within the city limits of Omaha, Nebraska
and in a portion of the Kansas City metropolitan area located in Kansas.


RELATIONSHIP WITH WINGATE INNS, L.P.

     Supertel signed an agreement with Wingate Inns, L.P. in December 1995
which provides rights for Supertel to develop five Wingate Inns in
the Dallas/Ft.Worth and Houston metropolitan areas through June 30, 1998.
Wingate Inns, L.P. is an affiliate of Cendant Corp., a publicly-held 
corporation.  Super 8 Motels, Inc. is also an affiliate of Cendant Corp.

     Wingate Inns is a limited service hotel chain which features comfortable 
suite-like rooms focused on business travelers.  Wingate Inns hotels are in
the upper mid-scale segment of the lodging industry.  See "Business - Lodging 
Industry Overview". Supertel will pay a monthly franchise fee of 8.5% of
each Wingate Inns gross receipts from room revenues, of which 4% will be
contributed to an advertising fund administered by Wingate Inns, L.P. A minimum
initial franchise fee of $35,000 is required upon the execution of a franchise
agreement for a new location, with an additional initial fee of $350 for each
room in excess of 100 rooms at the location.  Subject to certain conditions,
Wingate Inns, L.P. will advance $250,000 to Supertel for each new Wingate Inn;
one-fifteenth of the advance will be forgiven without payment annually following
the motel opening if Supertel complies with the terms of the franchise
agreement.



                                     -10-


<PAGE>   11


COMPETITION

     There is significant competition in the lodging industry.  There are
numerous lodging chains that operate on a national or regional basis, as well
as other motels, motor inns and independent lodging establishments throughout   
the United States.  Many of the Company's competitors have recognized trade
names, greater resources and longer operating histories than the Company.
Supertel's motels also compete directly with other economy motel chains 
that employ concepts similar to Super 8 motels and compete for the same type 
of cost-conscious traveler.  The number of available rooms in these
economy motels has grown rapidly.

GOVERNMENT REGULATION

     Supertel is subject to various federal, state and local laws, regulations  
and administrative practices affecting its business.    Supertel's motel
facilities must comply with regulations related to health, sanitation and
safety standards, equal employment, minimum wages, building codes and zoning
ordinances and licenses to operate motel facilities.  Supertel believes it is in
substantial compliance with all such regulations.

ENVIRONMENTAL MATTERS

     Under various federal, state and local laws and regulations, an owner
or operator of real estate may be liable for the costs of removal or    
remediation of certain hazardous or toxic substances on such property. 
Such laws often impose such liability without regard to whether the owner 
knew of, or was responsible for, the presence of hazardous or toxic 
substances.  The cost of remediation or removal of such substances may be 
substantial, and the presence of such substances, or the failure to promptly 
remediate such substances, may adversely affect the owner's ability to sell such
real estate or to borrow using such real estate as collateral.

     Supertel believes that the motel properties are in compliance in all
material respects with all federal, state and local ordinances and regulations
regarding hazardous or toxic substances and other environmental matters.



                                     -11-



<PAGE>   12



INSURANCE

     Supertel has insurance for risks such as fire, personal injury and
property damage claims in connection with the operation of the motels as
its management deems appropriate and in accordance with prudent risk
management, taking into consideration the availability and cost thereof.  The 
motels are insured for other risks, such as business interruption insurance  
covering six months of each motel's revenues, in amounts deemed adequate by 
Supertel.

EMPLOYEES

     As of December 31, 1997 Supertel had 1,129 employees.  The corporate staff
consisted of 59 employees involved in development/construction, 
operations/training, and purchasing and accounting.  The motel-level employees
included 71 managers and assistant managers/relief managers, 405 desk clerks,
533 housekeepers and shuttle drivers and 61 maintenance employees. Approximately
46% of the desk clerks and housekeepers are part-time employees.  The number of
Supertel employees varied during 1997 from a low of 1,113 employees to a high of
1,446 employees due to the seasonal nature of the motel business and the
addition of motels during the year.  None of the employees is covered by a
collective bargaining agreement. Supertel considers its relations with employees
to be good.

FINANCIAL INFORMATION ABOUT FOREIGN OPERATIONS AND EXPORT SALES

     Supertel has no foreign locations or export sales.

EXECUTIVE OFFICERS OF SUPERTEL

     The executive officers of Supertel at February 28, 1998 are listed
below, together with their ages and all Company positions and offices held
by them.

<TABLE>
<CAPTION>

      NAME                    AGE                   POSITION
      ----                    ---                   --------
<S>                            <C>       <C>
Paul J. Schulte                64        Director, President and Treasurer

Steve H. Borgmann              52        Director, Executive Vice President 
                                         and Chief Operating Officer

Richard L. Herink              44        Director, Executive Vice President

Troy Beatty                    33        Senior Vice President and Chief
                                         Financial Officer
</TABLE>


                                     -12-



<PAGE>   13




     Paul Schulte founded a predecessor of Supertel and was a controlling
shareholder, director and president of the predecessor's operations since       
1974. Mr. Schulte has extensive experience in acquiring, developing, owning,
managing and operating economy motels for Supertel or its predecessors since
1978.

     Steve Borgmann was a controlling shareholder, director and officer of
the predecessor's operations since 1983. Mr. Borgmann has extensive     
experience in acquiring, developing, owning, managing and operating economy 
motels for Supertel or its predecessors since 1978.

     Richard Herink became executive vice president of Supertel in August
1995.  From April 1993 to August 1995, he was executive vice president  
of FirsTier Bank, N.A.,  Norfolk.  Prior to April 1993, he was a division
president with Farm Credit Services of the Midlands.

     Troy Beatty became chief financial officer of Supertel in December 1996. 
From March 1994 to December 1996, Mr. Beatty was division controller with
Raytheon Corp. in Amana, Iowa; from March 1990 to March 1994 was assistant
controller with Cooper Industries; and from August 1987 to March 1990 was senior
associate with Coopers & Lybrand.

                           CERTAIN BUSINESS FACTORS

     THIS 10-K CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION
RELATING TO SUPERTEL THAT ARE BASED ON THE BELIEFS OF SUPERTEL MANAGEMENT AS 
WELL AS ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY AVAILABLE TO SUPERTEL 
MANAGEMENT.  SUCH STATEMENTS REFLECT THE CURRENT VIEWS OF SUPERTEL WITH 
RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND 
ASSUMPTIONS, INCLUDING THE BUSINESS FACTORS DESCRIBED IN THIS 10-K. SHOULD ONE 
OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING 
ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE 
DESCRIBED HEREIN AS BELIEVED, ESTIMATED OR EXPECTED.

     LODGING INDUSTRY RISKS.  The lodging industry in general, including
Super 8, Comfort Inns and Wingate Inns, may be adversely affected by    
such factors as changes in national and regional economic conditions
(particularly in geographic areas in which the Company has a high 
concentration of motels), changes in local market conditions, oversupply of
motel space or a reduction in local demand for rooms and related services, 
changes in interest rates and the availability of financing.


                                     -13-


<PAGE>   14


     Operating factors affecting the lodging industry generally, including
the Company, include (i) competition from other motels and hotels, (ii) 
demographic changes, (iii) the recurring need for renovations, refurbishment
and improvements of motels and increased  expenses  related to motel security,
(iv) restricted changes in zoning and similar land use laws, and regulations
relating to health, safety, disability and employment laws, (v) changes in
government regulations that influence or determine wages, prices or
construction costs, (vi) changes in the  characteristics of motel locations, 
(vii) the inability to secure property and liability insurance to fully
protect against all losses or to obtain such insurance at reasonable costs, 
(viii) changes in real estate tax rates and other operating costs, (ix) changes 
in travel patterns which may be affected by increases in transportation costs 
or gasoline prices, weather patterns or construction of highways, and 
(x) changes in brand identity and reputation.

     Unexpected or adverse changes in any of the foregoing factors could have 
a material adverse effect on Supertel's financial condition or results of
operations.

     EXPANSION RISKS. Supertel has adopted a strategy to increase the number
of lodging facilities through the development of new motels and hotels and      
the acquisition of existing motels.  The Company's ability to expand depends
on a number of factors, including the selection and availability of suitable 
locations at acceptable prices, the hiring and training of sufficiently
skilled management and personnel, and the availability  of financing.  There
can be no assurance that financing, or desirable locations for acquisitions or 
new development will be available, or if available, will be on terms 
acceptable to Supertel. There can be no assurance that the Company's expansion 
plans will be completed successfully or that the nature of such expansion will 
not be modified to reflect future events or economic conditions.

     New motel development is subject to a number of additional risks including
construction delay or cost overruns, risks that properties will not achieve  
anticipated occupancy levels or sustain expected room rate levels, and
commencement risks such as receipt of zoning, occupancy and other required
governmental permits and authorizations, which in each case could adversely
affect Supertel's financial performance.  Supertel has historically incurred
significant costs relating to pre-opening activities and operating expenses
prior to reaching stabilized levels of occupancy and average daily room rates.
Consequently, as the Company develops new motel properties, the costs associated
therewith may negatively impact Supertel's results of operations.

     Acquisitions entail risks that the new properties will fail to perform
in accordance with expectations and that the anticipated costs of renovation    
or conversion will prove inaccurate, as well as general investment risks
associated with any new real estate investment.  Certain of the properties 
acquired by Supertel may not operate as Super 8  



                                     -14-


<PAGE>   15


franchisees, and the Company may incur financial and guest acceptance risks in 
converting such properties to Super 8 motels or operating such properties
under a franchise agreement with a different motel franchisor.

     RISKS OF LEVERAGE.  Supertel's business is capital intensive and the
Company will have significant capital requirements in the future. In the        
event Supertel's cash flow and working capital are not sufficient to fund its 
expenditures or to service its indebtedness, the Company would be required to 
raise additional funds through the sale of additional equity securities, the 
refinancing of all or part of its indebtedness, the incurrence of additional 
indebtedness, or the sale of assets. There can be no assurance that any of 
these sources of funds would be available in amounts sufficient for Supertel 
to meet its obligations. Furthermore, Supertel's leveraged capital structure 
could limit its ability to finance its acquisition strategy and other capital 
expenditures, or to compete effectively or to operate successfully under 
adverse economic conditions. In addition, adverse economic conditions 
could result in higher interest rates which could increase debt service 
requirements on Supertel's floating rate debt and thereby reduce the amounts
available for acquisition and development of lodging facilities.

     MANAGEMENT OF GROWTH.  Supertel has experienced rapid growth in the
number of motel rooms owned and operated.  Such growth has resulted in, and     
is expected to continue to create, increased responsibilities for
management personnel, as well as added demands on the Company's operating
and financial systems.  In addition, as the Company continues to pursue its
growth strategy, new motels and hotels will be opened in geographic markets in
which Supertel has limited or no previous operating or franchise experience. 
If the Company is unable to manage its growth effectively, the Company's
financial condition and results of operations could be materially and adversely
affected.

     LODGING INDUSTRY COMPETITION.  The economy segment of the lodging industry 
is highly competitive.  The success of an economy motel in its  market, in large
part, will be dependent upon its ability to compete in such areas as
reasonableness of room rates, quality of accommodations, service level and
convenience of location. Supertel's motels compete with existing motel and hotel
facilities in their geographic markets, as well as future motel and hotel
facilities in proximity to Supertel's properties. The Company's motels generally
operate in areas that contain numerous competitors.  Demographic, geographic or
other changes in one or more of the Company's markets could impact the
convenience or desirability of the sites of certain motels, which would
adversely affect the operations of those motels.  There can be no assurance that
new or existing competitors will not significantly lower rates or offer greater
convenience, services or amenities or significantly expand or improve facilities
in a market in which the Company's motels compete.  In addition, competition
generally reduces the number of suitable motel acquisition opportunities offered
to the Company and increases the 



                                     -15-


<PAGE>   16



bargaining  power of property owners seeking to sell, which could adversely  
affect the availability of or price paid for existing properties acquired by 
Supertel.

     SEASONALITY.  The motel industry is seasonal in nature.  Generally, motel  
revenues are greater in the second and third quarters than in the first
and fourth quarters.  This seasonality can be expected to cause quarterly
fluctuations in the Company's revenues. Quarterly earnings also may be adversely
affected by factors beyond the Company's control, including weather conditions
and economic factors.

     LOSS OF FRANCHISES OR CERTAIN FRANCHISOR SERVICES.  Each Super 8 motel
owned by Supertel will be subject to a franchise  agreement in the form provided
by Super 8 Motels, Inc. Similarly, each Wingate Inn hotel owned by Supertel will
be subject to a franchise agreement with Wingate Inns, L.P. The continuation of
each franchise agreement will be subject to specified operating standards and
other terms and conditions.  The failure of Supertel to maintain such standards
or adhere to such other terms and conditions with respect to a motel or hotel
could result in the loss or cancellation of the franchise agreement covering
that property and may have an adverse effect upon the profitability of a covered
property. In addition, the failure of the franchisor to perform its obligations
under each Franchise Agreement may have an adverse effect on Supertel. See
"Business - Relationship With Super 8 Motels, Inc." and "Business - Relationship
with Wingate Inns, L.P."

     DEPENDENCE ON SENIOR MANAGEMENT.  Supertel's continued success will depend 
to a significant extent upon the efforts and abilities of its senior management
team, including Paul J. Schulte, Steve H. Borgmann and Richard L. Herink.  The 
loss of their services could have a material adverse affect upon Supertel's  
business.  Supertel has employment agreements with each of these individuals.

     ENVIRONMENTAL MATTERS.  Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real property may   
become liable for the cost of removal or remediation of certain  hazardous
substances released on or in its property.  Such laws often impose liability
without regard to whether the owner or operator knew of, or was responsible for,
the release of such hazardous substances.  The presence of such substances, or
the failure to properly remediate any contamination from such substances, may 
adversely affect the owner's ability to sell the real estate or to borrow 
using the real estate as collateral.  In addition to clean-up actions
brought by the federal, state and local agencies, the presence of hazardous
waste or materials on a property could result in personal injury or similar
claims by private plaintiffs.  Neither Supertel nor its predecessors have been
notified by any governmental authority of any liability or other claim in
connection with any of its motels and Supertel is not aware of any other 

                                     -16-




<PAGE>   17



environmental condition with respect to any of its motels that could be
material to its results of operations. See "Business - Environmental Matters."

ITEM 2.  PROPERTIES.

     Supertel's executive, training and administrative operations are located 
in an owned building containing approximately 18,000 square feet of space in 
Norfolk, Nebraska.

     The Company's motel properties are all owned.  See "Business - Motel
Properties" and "Business - Motel Operations".

ITEM 3.  LEGAL PROCEEDINGS.

     Supertel from time to time is involved in litigation relating to claims
arising out of its operations in the normal course of business.  In the 
opinion of management, the ultimate disposition of all litigation involving
Supertel will not have a material impact on Supertel's consolidated financial
statements.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matter was submitted to a vote of stockholders of Supertel during the 
fourth quarter of the fiscal year ended December 31, 1997.

                                   PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER 
         MATTERS.

     The sections entitled "Quarterly Financial Information (Unaudited)" on
page 20 and "Common Stock" on page 21 of the 1997 Annual Report are incorporated
herein by reference.

ITEM 6.  SELECTED FINANCIAL DATA.

     The section entitled "Selected Financial Statement Data" on page 5 of the 
1997 Annual Report is incorporated herein by reference.


                                     -17-




<PAGE>   18



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS.

     The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 6 through 8 of the 1997 Annual
Report is incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The consolidated financial statements of Supertel Hospitality, Inc. and
subsidiaries, and the independent auditors' report thereon, are incorporated
herein by reference to pages 9 through 19 of the 1997 Annual Report.  Certain
supplementary data is incorporated herein by reference to the section entitled
"Quarterly Financial Information (Unaudited)" on page 20 of the 1997 Annual
Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE.

     There has been no change in Supertel's independent accountants during the 
two most recent fiscal years.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The section entitled "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the 1998 Proxy Statement is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

     The sections entitled "Director Meetings and Compensation", "Summary
Compensation Table", "Option Grants in 1997", and "Option Exercises in Fiscal
1997 and Year-End Values" in the 1998 Proxy Statement are incorporated herein
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The section entitled "Certain Stockholders" in the 1998 Proxy Statement
is incorporated herein by reference.



                                     -18-


<PAGE>   19



ITEM 13. CERTAIN TRANSACTIONS AND RELATIONSHIPS.

     The section entitled "Certain  Agreements and Transactions" in the 1998
Proxy Statement is incorporated herein by reference.


                                   PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a) (1)  FINANCIAL STATEMENTS.  The consolidated financial statements of 
         Supertel, and the independent auditors' report thereon, have been 
         incorporated by reference as set forth in Item 8 above.

     (a) (2)  FINANCIAL STATEMENT SCHEDULES.    No financial statement 
         schedules are required pursuant to this item.

     (a) (3)  EXHIBITS.  The Exhibit Index, set forth below, is incorporated 
         herein by reference.

     (b) REPORTS ON FORM 8-K. Supertel did not file any reports on Form 8-K 
         during the last quarter of its fiscal year ended December 31, 1997.




                                     -19-




<PAGE>   20



                                  SIGNATURES


Pursuant to the requirements of Section 13 or Section 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized, in the City of 
Norfolk, State of Nebraska, on the 23rd day of March, 1998.

                                   Supertel Hospitality, Inc.


                                   By: /s/ Paul J. Schulte
                                       ----------------------------------------
                                       Paul J. Schulte, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this       
report has been signed below by the following persons on behalf of Supertel 
Hospitality, Inc. and in the capacities indicated on the 23rd day of March,
1998.


/s/ Paul J. Schulte              Director and Chief Executive Officer
---------------------------
Paul J. Schulte

/s/ Steve H. Borgmann            Director, Executive Vice President and
---------------------------        Chief Operating Officer
Steve H. Borgmann                

/s/ Richard Herink               Director and Executive Vice President
---------------------------
Richard Herink

/s/ Troy Beatty                  Senior Vice President (Chief Financial
---------------------------        Officer and Principal Accounting Officer)
Troy Beatty                        


/s/ Joseph Caggiano              Director
---------------------------      
Joseph Caggiano

/s/ Loren Steele                 Director
---------------------------      
Loren Steele



                                     -20-



<PAGE>   21
SHAREHOLDER INFORMATION 
DIRECTORS/OFFICERS


CORPORATE OFFICE
Supertel Hospitality, Inc.
309 North 5th Street
P.O. Box 1448 
Norfolk, NE 68702-1448
Telephone 402-371-2520
Fax 402-371-4229


ANNUAL MEETING
The 1998 annual meeting of stockholders will be held on 
May 1, 1998 at 2 p.m. central time at the Doubletree Inn,
1616 Dodge Street, Omaha, NE 68102.


AVAILABILITY OF 10-K REPORT
Stockholders may obtain a copy of Supertel's Form 10-K
Annual Report for 1997 by writing the investor relations
contact at the corporate office.


INVESTOR RELATIONS CONTACT
Troy M. Beatty
Chief Financial Officer
Telephone 402-371-2520
Fax 402-371-4229


COMMON STOCK
The common stock is traded on the NASDAQ National
Market System under the symbol SPPR. On March 13, 
1998, there were approximately 1,225 beneficial owners
of the company's common stock.


STOCK TRANSFER AGENT
First National Bank of Omaha, Omaha, NE

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, Omaha, NE

LEGAL COUNSEL
McGarth, North, Mullin & Kratz, PC
Omaha, NE




Directors

Joseph Caggiano
Vice Chairman Emeritus
Bozell, Jacobs, Kenyon & Eckhardt, Inc.

Loren Steele
Director, Super 8 Motels, Inc.
Chairman, International Franchise Association 


Paul Schulte
President and Chief Executive Officer
Supertel Hospitality, Inc.

Steve Borgmann
Executive Vice President and Chief Operating Officer
Supertel Hospitality, Inc.

Richard Herink
Executive Vice President 
Supertel Hospitality, Inc.



OFFICERS

Paul Schulte
President and Chief Executive Officer

Steve Borgmann
Executive Vice President and Chief Operating Officer

Richard Herink
Executive Vice President

Troy M. Beatty
Senior Vice President and Chief Financial Officer

Steve Gilbert
Senior Vice President of Purchasing

Karen Schulte
Senior Vice President of Administration

<PAGE>   22



                                EXHIBIT INDEX

<TABLE>
<CAPTION>


EXHIBIT                  DESCRIPTION                                   PAGE
-------                  -----------                                   ----
  <S>       <C>
  3.1       Certificate of Incorporation of Supertel, incorporated 
            herein by reference to the Company's Registration 
            Statement on Form S-1 (Reg. No. 33-75796) filed with 
            the Securities and Exchange Commission on March 1, 
            1994 (the "Registration Statement").

  3.2       Bylaws of Supertel, incorporated herein by reference to the 
            Registration Statement.

  4.1       Revolving Term Promissory Note and Loan Agreement 
            (Modified and Extended) dated December 30, 1996 between 
            Supertel and First Bank National Association, incorporated
            herein by reference to the Company's Annual Report on 
            Form 10-K for the year ended December 31, 1996.

  4.2       Modification to Revolving Term Promissory Note and Loan 
            Agreement dated June 24, 1997 between Supertel and First 
            Bank National Association......................................

  4.3       Term Loan Agreement dated May 9, 1997 between Supertel and 
            First Bank National Association, incorporated herein by
            reference to the Company's quarterly report on Form 10-Q 
            for the quarter ended June 30, 1997.

  4.4       Loan Agreement dated October 13, 1994 between Supertel and 
            Iowa State Savings Bank, incorporated herein by reference
            to the Company's quarterly report on Form 10-Q for the 
            quarter ended September 30, 1994.

  10.1      Form of Super 8 Franchise Agreement, incorporated herein 
            by reference to the Registration Statement.

  10.2      Amendment dated March 4, 1996 to Super 8 Franchise Agreements 
            incorporated herein by reference to the Company's annual 
            report on Form 10-K for the year ended December 31, 1995.

  10.3      Form of Wingate Inn Franchise Agreement incorporated herein 
            by reference to the Company's annual report on Form 10-K 
            for the year ended December 31, 1995.

</TABLE>


<PAGE>   23


<TABLE>
<CAPTION>


EXHIBIT                  DESCRIPTION                                   PAGE
-------                  -----------                                   ----
  <S>       <C>

  10.4      Amended and Restated Territorial Development Agreement 
            dated June 30, 1994 between Supertel and Super 8 Motels,
            Inc., incorporated herein by reference to the Company's 
            quarterly report on Form 10-Q for the quarter 
            ended June 30, 1994.

  10.5      Amendment dated May 31, 1995 to Amended and Restated 
            Territorial Development Agreement between Supertel and 
            Super 8 Motels, Inc., incorporated herein by reference 
            to the Company's quarterly report on Form 10-Q for the 
            quarter ended June 30, 1995.

  10.6      Supertel's 1994 Stock Option Plan, incorporated herein 
            by reference to the Registration Statement.

  10.7      Supertel's 1997 Stock Plan..................................

  10.8      Employment Agreements dated May 1, 1995 between Supertel and 
            each of Paul J. Schulte and Steve H. Borgmann, incorporated 
            herein by reference to the Company's quarterly report on 
            Form 10-Q for the quarter ended June 30, 1995.

  10.9      Employment Agreement dated November 6, 1995 between Supertel 
            and Richard L. Herink, incorporated herein by reference 
            to the Company's annual report on Form 10-K for the
            year ended December 31, 1995.

  13.1      Supertel's Annual Report to Stockholders for the fiscal 
            year ended December 31, 1997................................

  21.1      List of Subsidiaries........................................

  23.1      Consent of KPMG Peat Marwick LLP............................

</TABLE>

     Pursuant to Item 601(b)(4) of Regulation S-K, certain  instruments with
respect to long-term debt are not filed with this annual report on Form 
10-K. Supertel will furnish a copy of any such long-term debt agreement 
to the Securities and Exchange Commission upon request.

     Management contracts and compensatory plans are set forth as exhibits
10.6 through 10.9.