Both Squidward and SpongeBob are walking to work, and SpongeBob tells a story about overcooking the fries. In the meantime, Squidward realizes the Krusty Krab has dramatically changed. Mr. Krabs has turned it into the Krusty Towers, with the original building now on top of a large tower. Mr. Krabs explains that while he was on vacation, he was shocked by his outrageously high hotel bills, tallying up to $345.00 (mostly shocked at a twenty five dollar charge for a hamburger he had), and realized how much money hotels can make. He says that the employees there lived by a code: "We shall never deny a guest even the most ridiculous request", which was on a gold plaque above a fireplace in the hotel he stayed at. He put that one for the Krusty Towers.
A customer enters to buy a Double Krabby Patty with cheese, then leaves when Mr. Krabs tells him that he must book a hotel room to order room service to eat their food. Patrick soon arrives, and becomes the hotel's first actual guest. After signing the register, which he believed was a test, Squidward carries Patrick's bags (which were full of rocks), and he tries to take the guest elevator, but Mr. Krabs stops him and explains that he must take the "employee elevator", which is in fact a staircase. Patrick then requests Squidward several more times for ridiculous reasons. Whenever Squidward got to the bottom of the hotel, Mr. Krabs told him to go back up to do something that Patrick wants. After failing to give Patrick a "bubble bath", he quits.
He walks out the door and comes back as a guest instead of an employee. He demands a room on the top floor and that Mr. Krabs to carry him to get there. Then he ordered a Krabby Patty for Mr. Krabs to eat because it had hair and toenails, for humor obviously. Also, Patrick had all the cheese which were supposed to be on that Krabby Patty. He then wanted his cookies like the ones his mother makes which Mr. Krabs resentfully had to get. Then, he wanted Mr. Krabs and SpongeBob to repaint his room only to get it back to its original state. He then wanted an indoor pool. After getting an indoor swimming pool, Patrick jumps in, and the force causes the hotel to collapse, leaving only the original Krusty Krab standing.
Patrick, SpongeBob, Squidward and Mr. Krabs luckily survive, but end up in the hospital with massive injuries. When Mr. Krabs sees the hospital fee ($15,000), he scraps the idea of a hotel and tells Squidward, SpongeBob and Patrick that they are going to medical school, much to Squidward's dismay and SpongeBob and Patrick's delight.
This episode is one of the most well recieved of the Post-Movie era.
This is actually the second time Squidward's mom is seen. The first was in Fools in April when she appeared in Squidward's thought bubble saying "You stink!" However, in her previous apperance she had a deeper, more masculine voice.
This is one of the only times Squidward is nice to SpongeBob and Patrick (Come on in, the water's fine!").
Running Gags: Patrick keeps on forgetting where he is, saying "This is a ______?" and Mr. Krabs recieving overpriced bills.
The episode's title is a parody of "Fawlty Towers", a British sitcom.
Patrick's drawing is an obvious reference to King Kong or Godzilla .
Despite the episode and the building being named "The Krusty Towers," there is only one building.
When SpongeBob says "How may I serve you, sir?" he has no eyelashes, until when he salutes, then they appear in the remainder of the episode.
The first clip showing Mr. Krabs saying, "That hotel was a bad idea" it showed bandages on his feet, but when he says "forget hotels" the bandages shown on the tip of his feet were gone, then when he said "pack your bags, boys" the bandages were shown again.
Squidward got stung by a jellyfish. In the next shot after he got stung, his sting suddenly disappeared.
When Mr. Krabs first served Squidward and took him upstairs, he was wearing blue clothes. When he went back to the reception desk, Mr. Krabs was wearing a black suit. When he once again went upstairs to assist Squidward, Mr. Krabs was once again in his blue clothes.
The Krusty Towers is on the wrong side of Conch Street. It is usually on Patrick's Rock side, not SpongeBob's Pineapple side.