The Krusty Towers was a hotel and a short-lived replacement of the Krusty Krab, and has only appeared in the episode "Krusty Towers." During its existence, Mr. Krabs planned on running a more successful and paying business, but service did not go the way he imagined.
The Krusty Towers is basically a tall tower with several floors and the original Krusty Krab restaurant on top. Mr. Krabs also mentioned an unseen pool being out back of the hotel.
The inside of the hotel consists of a lobby, several floors and rooms. At the front desk in the lobby, a clerk has a bell, a guest book, and keys to each room. It also has a guest elevator and an employee elevator (the employee elevator are just a row of stairs). Most of the rooms look the same - except Patrick's room got covered in cheese and Squidward kept changing the scenery of his room until it went back to normal. Before the hotel's destruction, another pool was added inside on the top floor of the hotel which weakened the building.
It all started when Mr. Krabs goes to the fast food convention, which he booked into a fancy hotel whose motto was "We shall never deny a guest, even the most ridiculous request." Before he left, he was charged a pricey hotel bill ($25.00 for a hamburger). The costly service gave him the idea of a new money-making scheme, and the Krusty Towers was born.
When SpongeBob and Squidward hear about the story of the new hotel, they obtain new uniforms without additional staff. SpongeBob has no trouble following the motto, but Squidward refuses to do many things and eventually quits. Suddenly, Squidward comes back as a guest and starts abusing the employees.
When Patrick made a huge cannonball into the indoor pool, the hotel floors caved in, causing the entire hotel to collapse floor by floor until only the Krusty Krab itself was left standing, unharmed. Patrick, SpongeBob, Squidward, and Mr. Krabs were all badly injured and were sent to the hospital, where Mr. Krabs gets the idea of building his own hospital after receiving his medical bill. The hotel's design was the blame for the collapse.
Squidward asked where all the new hotel employees were. But he and SpongeBob were revealed to be the only employees. Mr. Krabs never got any other employees for some reason, the reason for this is he will give a huge amount of money on the paycheck to his hired employee(s). Later, however, Squidward quits because of being over-worked by Mr. Krabs. Also, Mr. Krabs is shown to be an employee later in the episode.
The only known meal at the Krusty Towers Hotel is the Krabby Patty. It can only be obtained by ordering room service and getting them made however wanted. The other meals are the same orders at the Krusty Krab.
The other meals known to be eaten were:
Krabby Patty with no crust and cheese. (Patrick dislikes the crust)
50 Krabby Combo. (Patrick and SpongeBob shared the meal)
Krabby Patty with toenail clippings and nose hair, without the cheese. (Ordered by Squidward for Mr. Krabs to eat)
Mr. Krabs was plagiarizing the motto from the other hotel and should have been arrested.
Patrick Star was the first person to stay at the hotel and order Krabby Patties. However, he kept forgetting it was a hotel.
Despite the building, and the episode being called "The Krusty Towers," there is only one building.
The hotel apparently has seventeen floors, because Squidward wanted a room on the top floor, and it turned out to be the seventeenth floor. But when you look closely, it only has eleven floors (including the lobby and Krusty Krab). If Squidward wanted the penthouse, he'd live in the Krusty Krab main building. However, the Krusty Krab is not a hotel room, so that is one reason why it was changed to him going into the 17th floor.