UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended December 31, 2004

Commission File Number 1-14331

Interstate Hotels & Resorts, Inc.

4501 North Fairfax Drive

Arlington, VA 22203

703-387-3100

www.ihrco.com

This Form 10-K can be accessed at no charge through above web site.

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock par value $0.01 per share and purchase rights

for Series A Junior Participating Preferred Stock, par value $0.01 per share                     New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

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 for which the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     þ

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 registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.     o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).     þ

The aggregate market value of common stock held by non-affiliates of the registrant was $97,054,852, (based on the closing sale price of $5.39 on June 30, 2004 as reported by the New York Stock Exchange). For this computation, the registrant has excluded the market value of all shares of its common stock reported as beneficially owned by executive officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that such person is an “affiliate” of the registrant. The number of shares of Common Stock outstanding at March 1, 2005 was 30,718,375.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement relating to the Registrant’s 2005 Annual Meeting of Shareholders are incorporated by reference into Part III. We expect to file our proxy statement on or about April 15, 2005.

INTERSTATE HOTELS & RESORTS, INC.

FORM 10-K

For the Fiscal Year Ended December 31, 2004

INDEX

PART I

THE COMPANY

Overview — We are the largest independent U.S. hotel management company not affiliated with a hotel brand, measured by number of rooms under management. We have two operating divisions, hotel management and corporate housing, both of which are reportable operating segments. Each division is managed separately because of its distinct products and services. In our hotel management business, we generate revenues from fees we receive for managing a portfolio of upscale, full-service and premium select-service hospitality properties. As of March 1, 2005, we own two hotel properties and hold non-controlling equity interests in 10 joint ventures which hold ownership interests in 26 of our managed properties. We also generate revenue from providing ancillary services in the hotel, resort, conference center and golf markets. The ancillary services we provide include insurance and risk management services, purchasing and project management services, information technology and telecommunications services and centralized accounting services. Through our BridgeStreet corporate housing division described below, we generate revenues from the leasing of corporate long-term stay apartments.

As of December 31, 2004, we managed 306 properties, with 68,242 rooms in 41 states, the District of Columbia, Canada, Russia and Portugal. As of December 31, 2004, we had 2,941 apartments under lease or management in the United States, France and the United Kingdom through our BridgeStreet corporate housing division.

Our portfolio of managed properties is diversified by brand, franchise and ownership. We manage hotels representing more than 30 franchise and brand affiliations and operate 28 independent hotels. We operate hotels for more than 60 different ownership groups, including individual investors, institutional investors, investment funds, such as Oak Hill Capital Partners, L.P., CNL Properties, Inc., Cornerstone Real Estate and W.P. Carey, and public real estate investment trusts or “REITs”, such as MeriStar Hospitality Corporation (“MeriStar Hospitality”), Equity Inns, Inc., FelCor Lodging Trust Incorporated (“FelCor”), Host Marriott Corporation and Sunstone Hotel Investors, Inc.

We were formed on August 3, 1998, as MeriStar Hotels and Resorts, Inc., (“MeriStar”) when we were spun off by CapStar Hotel Company (“CapStar”) and became the lessee and manager of all of CapStar’s hotels. Immediately after the spin-off, American General Hospitality Corporation (“American General”) (a Maryland corporation operating as a REIT) and CapStar merged to form MeriStar Hospitality. We then acquired the management and leasing business of the manager and lessee of American General’s hotels. On May 31, 2000, we completed the acquisition of BridgeStreet Accommodations, Inc., to create our BridgeStreet corporate housing division. On January 1, 2001, in connection with the implementation of new REIT tax laws that permit subsidiaries of a REIT to lease the real estate it owns, we assigned the leases on each of the properties we were leasing from MeriStar Hospitality to taxable subsidiaries of MeriStar Hospitality and entered into management contracts with those taxable subsidiaries for each of the hotels owned by MeriStar Hospitality.

On July 31, 2002, MeriStar merged with Interstate Hotels Corporation (“Old Interstate”) to create Interstate Hotels & Resorts, Inc. (“Interstate”, or “we”). The transaction was a stock-for-stock merger of Old Interstate into us in which Old Interstate stockholders received 4.6 shares of common stock for each equivalent share of Old Interstate stock outstanding. Holders of MeriStar common stock continued to own the same number of shares in new Interstate following the merger. Immediately after the merger, we effected a one-for-five reverse split of our common stock. The merger was accounted for as a reverse acquisition, with Old Interstate as the accounting acquirer, and MeriStar as the surviving company for legal purposes under the new name Interstate Hotels & Resorts, Inc. Because of the increase in scale of our management business following the merger, we began the process of separating our senior management team from that of MeriStar Hospitality, which was completed on October 22, 2003, when Steven D. Jorns, then Vice Chairman and Chief Investment Officer, replaced Paul Whetsell as our Chief Executive Officer and resigned from the board of directors of MeriStar Hospitality. Mr. Whetsell remains as our Chairman and as the Chairman and Chief

Executive Officer of MeriStar Hospitality. On February 17, 2005 Mr. Jorns resigned and Thomas F. Hewitt became our Chief Executive Officer.

Hotel Management — The hotels we manage are primarily located throughout the United States and Canada, including most major metropolitan areas and rapidly growing secondary cities. We also currently manage three hotels in Moscow, Russia, and one in Praia D’El Rey, Portugal. Our managed hotels include hotels operated under more than 30 nationally recognized brand names including Marriott, Hilton, Sheraton, Westin, Radisson, Doubletree, Embassy Suites, and Holiday Inn.

We manage properties primarily within the upscale, full-service and premium select-service sectors, and provide related management services for owners of both sectors as well. We believe the combination of these two sectors provides us with a balanced mix of managed assets. The two sectors attract a wide variety of potential customers, including both business executives and upscale leisure travelers. Managing in these two sectors allows us to provide systems and services to owners on a broad scale, capitalizing on the extensive experience of our corporate operations, sales and support personnel.

Corporate Housing — Through our corporate housing division we provide high quality, fully furnished accommodations under our BridgeStreet brand. We lease substantially all of our corporate housing accommodations through flexible, short-term leasing arrangements. We strive to match our supply of accommodations with current and anticipated client demand in order to reduce our financial exposure under leases. We believe our flexible leasing strategy allows us to react to changes in market demand for particular geographic locations and types of accommodations. Our management strives to develop strong relationships with property managers to ensure that we have a reliable supply of high quality, conveniently located accommodations. We operate throughout the United States, the United Kingdom and France. In 2004, we disposed of our corporate housing operations in Canada.

Operating Approach — Our senior hotel management team has successfully managed hotels in all sectors of the lodging industry. We attribute our management success to our ability to analyze each hotel as a unique property and to identify specific opportunities for cash flow growth present at each hotel. Our principal operating objective is to intensively manage the execution of our strategic business plan for each property in order to generate higher revenue per available room (or “RevPAR”) and increase net operating income, while providing our hotel guests with high-quality service and value. The challenging operating cycles that the hospitality business encounters make our depth of experience and strategies even more valuable to the owners of the hotels we manage. Similarly, our senior corporate housing executives have extensive experience in that line of business. We believe their experience in developing and executing successful business strategies are crucial to the future expansion and success of our operations in this business segment.

Financial information by industry segment and geographic area as of December 31, 2004, and for the three fiscal years then ended appears in the Segment Information note to our Consolidated Financial Statements included in Item 8 of this report.

Business Strategy

We operate primarily in two segments: hotel management and corporate housing. We operate our corporate housing division under the trade name BridgeStreet Corporate Housing Worldwide. We manage each segment separately because of its distinct products and services.

In our hotel management business segment, we generate earnings through base fees, incentive fees and other ancillary services from our management contracts. We work aggressively with the owners of our managed properties to increase relative performance of their hotels and reduce or control costs. Our hotel management business segment has four divisions: branded full-service hotels, independent hotels, international hotels and select-service hotels (operating under the Crossroads Hospitality name).

In our corporate housing business segment, we grow earnings through effective inventory management and cost control in our existing markets. We focus on high-growth markets such as New York, Washington, DC and Chicago and increase our sales effort in our primary national segments as demand shifts. We may reduce our inventory in areas in which demand is weak or declining. We may also add additional markets in North

America if the conditions are favorable. In addition, we are continuing to expand our Licensed Global Partner Program, in which we license the BridgeStreet name to various local corporate housing providers throughout the United States.

We intend to increase the number of our investments in hotels and resorts through the creation of joint ventures and/or real estate funds where we will invest alongside other real estate investors. These investment vehicles will allow us to increase our return on invested capital by providing potential returns from both the management fees and underlying real estate. We believe our willingness to provide substantial equity participation will further align our economic interest with that of our financial partners in each hotel property and will create a substantial number of additional joint venture opportunities. We will seek to acquire interests in upscale, full-service hotels, conference centers and resorts where we believe an opportunity exists to increase value through our operating expertise, market recovery and repositioning. We may also seek select whole-ownership acquisitions, which we will then market to joint venture partners.

BUSINESS

Hotel Management

Operating Strategy

Our principal operating objectives in our hotel management segment are to generate higher RevPAR, control costs and increase the net operating income of the hotels we manage, while providing our guests with high-quality service and value. We believe that skilled management is the most critical element in maximizing revenue and cash flow in properties, especially in upscale, full-service properties.

Personnel at our corporate office carry out financing and investment activities and provide services to support and monitor our on-site hotel operating executives. Each of our disciplines, including hotel operations, sales and marketing, human resources, food and beverage, technical services, information technology, development, legal, and corporate finance, is headed by an experienced team with significant expertise in that area. These departments support the hotel operating executives by providing on-line real-time financial reporting and review, accounting and budgeting services, sales and revenue management, cost controls, property management tools and other resources that we can create, maintain and deliver efficiently and effectively using our centralized corporate office resources.

Key elements of our management programs include the following:

We have notes receivable outstanding to certain of our managed hotels totaling $5.2 million at December 31, 2004. We also have outstanding commitments to fund additional investments or loans to certain properties, if requested, totaling $2.7 million at December 31, 2004.

Management and Real Estate Investment Expansion Strategy

We plan to expand our portfolio of hotels, resorts and conference centers by securing additional full-service and select-service management contracts through investments in joint ventures and investment funds. In addition, we attempt to identify properties that are promising acquisition candidates located in markets with economic, demographic and supply dynamics favorable to hotel owners. Through our due diligence process, we seek to select those acquisition targets where we believe selected capital improvements and focused management will increase the property’s ability to attract key demand segments, demonstrate better financial performance, and increase long-term value. In order to evaluate the relative merits of each investment opportunity, senior management and individual operations teams create detailed plans covering all areas of renovation and planned operation. These plans serve as the basis for our expansion decisions and guide subsequent renovation and operating plans.

We seek to invest in properties that meet the following market and hotel criteria:

Market Criteria.

Hotel Criteria.

We expect that our relationships throughout the industry will continue to provide us with a competitive advantage in identifying, evaluating and investing in hotels that meet our criteria. We have a record of successfully managing the renovation and repositioning of hotels in situations with varying levels of service, room rates and market types. We plan to continue to manage such renovation and repositioning programs as we invest in and/or acquire new management contracts of hotels, resorts and conference centers.

Corporate Housing

On May 31, 2000, we completed the acquisition of BridgeStreet Accommodations, Inc. BridgeStreet is a leading provider of corporate housing services in metropolitan markets located in the United States, the United Kingdom and France. In June 2004, BridgeStreet disposed of BridgeStreet Canada, Inc., the owner of our corporate housing operation in Toronto. The Toronto operations had incurred operating losses, primarily due to long-term lease commitments that did not allow us to adjust our inventory as easily as other markets. As of December 31, 2004, our BridgeStreet corporate housing division had 2,835 apartments under direct leases and 106 corporate housing units rented through other network partners. Additionally, through the growth of our Licensed Global Partner Program, we have added more than 5,332 units to our distribution channel, with 20 partners signed as of December 31, 2004. Total fees and commissions for this licensing program in 2004 were over $0.1 million. In addition, referrals from our licensed partners produced approximately $1.0 million in additional revenues for us.

Accommodations and Services

Accommodations — Through our BridgeStreet brand, we offer high-quality, fully furnished one-, two- and three-bedroom accommodations. These accommodations, together with the specialized service we offer, are intended to provide guests with a “home away from home.” We select our BridgeStreet apartments based on location, general property condition and basic amenities, with the goal of providing accommodations that meet each guest’s particular needs. As a flexible accommodation services provider, we can satisfy client requests for accommodations in a variety of locations and neighborhoods, including requests for proximity to an office, school or area attraction, as well as requests for accommodations of specific types and sizes. Most of BridgeStreet’s accommodations are located within quality property complexes and include dedicated parking and access to fitness facilities, including, in many cases, pools, saunas and tennis courts. We also are able to customize accommodations to a guest’s request with items such as office furniture, fax machines and computers.

In the US, we lease substantially all of our corporate housing accommodations through flexible, short-term leasing arrangements. We strive to match our supply of accommodations with client demand in order to reduce our financial exposure under the leases. We believe our flexible leasing strategy allows us to react to changes in market demand for particular geographic locations and types of accommodations. Our corporate housing management strives to develop strong relationships with property managers to ensure that we have a reliable supply of high-quality, conveniently located accommodations.

The United Kingdom market conditions often dictate that BridgeStreet take a higher risk in attaining quality furnished accommodations by leasing apartments and condominiums for terms in excess of two years. We believe that this is necessary in order to have the required number of apartments in the United Kingdom and to adequately service our evolving client base.

Our corporate housing accommodations generally are priced competitively with all-suite or upscale extended-stay hotel rooms even though we believe our accommodations offer more to our guests than those hotel rooms. We believe we generally are able to price our accommodations competitively due to our:

The length of a guest’s stay in our corporate housing accommodations can range from a week to a few months or more, with the typical stay ranging from 30 to 45 days.

Corporate Client Services — Our goal is to provide valuable, cost-effective housing to our corporate clients. Many of these clients’ human resource directors, relocation managers or training directors have significant, national employee lodging requirements. BridgeStreet aims to relieve our clients of the logistics and administrative burden often associated with relocating employees and/or providing them with quality, cost-effective housing for extended, but temporary assignments.

Guest Services — We strive to provide the highest quality of customer service by overseeing all aspects of a guest’s lodging experience, from preparations prior to the guest’s arrival to the moving out process. BridgeStreet maintains a representative in each city in which it operates to respond to guests’ needs. BridgeStreet’s guest services department offers customers comprehensive information services before and during their stays to help guests acclimate themselves to their new surroundings.

Sales and Marketing — Our corporate housing division focuses primarily on business-to-business selling. At the headquarters level, we focus on global accounts. These are large national companies that we believe can most benefit from our expanding national and international network. At the local level, each of BridgeStreet’s operating subsidiaries has corporate account specialists that call on local companies, including local branches of regional or national companies, to solicit business. Each account specialist focuses his or her efforts on the key decision makers at each company responsible for establishing and administering travel and accommodation policies. These decision makers are typically human resource directors, relocation managers or training directors. By aggressively pursuing relationships with potential clients and expanding services to existing clients, BridgeStreet seeks to become each client’s primary or sole provider of flexible accommodation services nationwide. We operate a global BridgeStreet sales force to market our worldwide capabilities to our international corporate clients. In addition, we have expanded BridgeStreet’s Internet presence to supplement traditional marketing strategies and to better serve our customers.

We tailor our marketing strategy to the needs of particular clients. For example, we may market ourselves to a corporation with relocating employees by focusing on our ability to situate families in two-and three-bedroom apartments, or provide access to accommodations in both metropolitan and suburban settings, or access to accommodations that allow pets. In contrast, when marketing to potential corporate clients in need of short-term housing, we might emphasize our flexible lease terms and our ability to customize an accommodation with amenities such as office equipment, including computers, additional telephone lines and other work-related items.

We intend to continue an advertising and promotional program designed to enhance the BridgeStreet name in the flexible accommodation services industry and broaden our client base. In addition, we promote our BridgeStreet brand name by advertising in trade publications, business publications, Chamber of Commerce listings, local visitor magazines, telephone directories and the Internet, and through periodic direct mail and e-brochure campaigns.

Expansion Strategies

Local Market Share — We have offices in 16 U.S. markets as of December 31, 2004. We train all of our BridgeStreet sales employees in our sales and marketing techniques. With a better-trained sales force and our management experience, we believe we will be in a better position to penetrate local markets and increase our market share.

Global Accounts — We believe global accounts have substantial growth potential for BridgeStreet. BridgeStreet’s current customers include a significant number of large multi-national companies with significant

national and international employee lodging requirements, such as Motorola, Accenture, Lehman Brothers and Credit Suisse First Boston. We plan to maximize sales to those existing corporate clients and to obtain new clients. We use a national sales and marketing program that promotes the BridgeStreet brand and highlights BridgeStreet’s national and international network, as well as BridgeStreet’s ability to serve as a central point of contact on all housing issues.

Franchise Program — In 2002, BridgeStreet launched a licensing program designed to extend BridgeStreet’s established network of partner properties and offer operating systems and new revenue opportunities to licensees. The licensing program is intended to expand BridgeStreet’s national and international presence to a globally branded enterprise capable of generating and maintaining fee streams from licensing and related value-added marketing and operational programs. Called the Licensed Global Partner Program, it provides regional corporate housing providers with access to BridgeStreet’s global customers, a centralized reservation system and sales and marketing support. These services will be offered to licensees who meet BridgeStreet’s stringent operational, financial and product quality standards. We view it as an opportunity for global expansion and to generate additional enterprise brand value. At December 31, 2004, we had 20 franchisees.

Network Partner Relationships — We have developed a network partner relationship with flexible accommodation service providers in the United States and in 40 countries worldwide. Through network partner agreements, BridgeStreet has expanded the number of locations where it can serve our clients’ needs. In some additional markets, BridgeStreet intends to enter into network partner agreements with one or more leading local or regional flexible accommodation service providers having the size and quality of operations suitable for serving BridgeStreet’s client base.

International Hotel Operations

Three of our hotels are located in Moscow, Russia. Our net management fees earned from these hotels for the year ended December 31, 2004 were $6.6 million, or 10.3% of total management fees. The management fees are paid in U.S. dollars.

In addition, we manage one hotel in Praia del Rey, Portugal, which opened on December 15, 2003. We have a loan outstanding from this owner at December 31, 2004, in the amount of $0.5 million.

We managed two hotels in Canada at the end of 2004 and in 2003. Our net management fees earned from these hotels for the year ended December 31, 2004, were $0.4 million, or 0.6% of total management fees.

Insurance and Risk Management

As an ancillary service to our hotel owners our subsidiary, we and our subsidiary, Northridge Insurance Company, offer our managed hotels reinsurance and risk management services. We purchase insurance from major insurance carriers at attractive rates due to large volume purchasing and our claims history. Northridge reinsures a portion of certain coverages from these third-party primary insurers. We provide the owners of the managed hotels the opportunity to participate in the policies at prices and coverages that we believe are more advantageous than third-party hotel owners could otherwise obtain. In conjunction with our risk management services and in order to minimize our insurance claims, we set policies regarding the standards of operation for participating managed hotels.

We offer this insurance coverage to our managed hotels under the terms of each individual management agreement. The policies provide for layers of coverage with minimum deductibles and annual aggregate limits. The policies are for coverage relating to innkeepers’ losses (general/comprehensive liability), garagekeeper’s legal liability and real and personal property insurance. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Overview — Insurance and Risk Management,” for more information.

Relationship with MeriStar Hospitality

We manage 72 of the properties owned by MeriStar Hospitality, a REIT, under long term management contracts. Paul W. Whetsell, our Chairman, is the Chairman and the Chief Executive Officer of MeriStar Hospitality.

Termination of Intercompany Agreement — We and MeriStar Hospitality have historically had a close operating relationship under the terms of our Intercompany Agreement. Effective July 1, 2004, we and MeriStar Hospitality agreed to terminate the intercompany agreement. We believe the termination of the intercompany agreement is an important step in our efforts to pursue our strategy of increasing our investment in hotels and resorts since we can now pursue real estate investment opportunities without first having to offer the opportunity to MeriStar Hospitality. In connection with the termination of the intercompany agreement we have agreed to modify the management agreements under which we manage the MeriStar Hospitality hotels as follows:

In addition, in connection with the termination of the intercompany agreement, MeriStar Hospitality and we have resolved our disagreement over the calculation of termination fees. We have agreed to calculate the termination fees based upon an average of the present value of remaining estimated management fees due to us under the contract (a) discounted as individual monthly payments and (b) discounted based on a lump sum payment at the end of the contract term. We have agreed to provide MeriStar Hospitality with a $2.5 million credit against termination fees owed for hotels to be sold by MeriStar Hospitality in the future. As of December 31, 2004, there was approximately $1.1 million of this credit remaining.

Management Agreements — Under our management agreements with MeriStar Hospitality, we receive a management fee for each hotel equal to a specified percentage of aggregate hotel operating revenues, increased or reduced, as the case may be, by 20% of the positive or negative difference between:

The total management fee for a hotel in any fiscal year will not be less than the base fee of 2.5%, or greater than 4.0% (with incentive fees) of aggregate hotel operating revenues. In 2004, the fee percentage we received on the hotels we managed for MeriStar was 2.5%.

The management agreements with MeriStar Hospitality have initial terms of 10 years with three renewal periods of five years each. A renewal will go into effect unless we elect not to renew the agreement or there is a change in the federal tax laws permitting MeriStar Hospitality or one of its subsidiaries to operate the hotels directly without adversely affecting MeriStar Hospitality’s ability to qualify as a REIT.

MeriStar Hospitality’s taxable subsidiaries have the right to terminate a management agreement for a hotel upon the sale of the hotel to a third party or if the hotel is destroyed and not rebuilt after a casualty. In the event of termination, MeriStar Hospitality’s taxable subsidiary will be required to pay us termination fees as described above.

During 2004, we recorded $4.3 million in termination fees related to hotels sold by MeriStar Hospitality. MeriStar Hospitality may also terminate a management agreement if certain performance standards at the hotel are not met in consecutive calendar years. We have been notified by MeriStar Hospitality that they believe that we have failed to meet the performance standards for consecutive years for 11 hotels. We are in discussions with MeriStar Hospitality with respect to these hotels, although we believe we have complied with our agreements regarding most of these properties and believe that the impact of any event of non-compliance will not be material to our financial position or results of operations.

We do not have the right to assign a management agreement without the prior written consent of the relevant taxable subsidiary of MeriStar Hospitality. A change in control of our company will require MeriStar Hospitality’s consent, and they may grant or withhold their consent at their sole discretion.

Intellectual Property and Franchises

We employ a flexible branding strategy based on each particular managed hotel’s ma