Mrs. Richards might just be the one person in Torquay who is cheaper than Basil; she refuses to turn on her hearing aid, as it wears down the batteries. The fact that she can't hear a word that anyone is saying is only an inconvenience for other people, not her. Basil is having some hearing problems as well: he doesn't want Sybil to hear about his betting, and winning, on a horse race. Sybil sees him with the money; Mrs. Richards claims to have lost some money, and it looks like Basil is going to have to turn his winnings over to her in order to stay out of trouble with Sybil.
Basil is impressed and at his fawning best when not one, but two doctors (husband and wife) check in to Fawlty Towers. All is sunshine and roses until he discovers that Mr. Dr. Abbott is a psychiatrist, and then tries his best to avoid the Abbotts. Unfortunately for him, the man in the room next to the Abbotts has attracted Basil's attention as well; trying to catch him out for bringing a lady-friend in to the hotel contrary to policy, Basil manages to make a mess of things, incurring great interest from Dr. Abbott and great wrath from Sybil.
Some American guests give Fawlty Towers an international flair, but their demands for American food, including a Waldorf Salad, leave Basil wishing that they'd stayed on their side of the Atlantic. An attempt to get Terry the chef to stay and cook for them falls through, and Basil has to try to make dinner for the loudly complaining Americans. The other guests, seeing that the Americans are getting results, begin complaining as well, until Basil gives them all an ultimatum.
A hotel patron dies while staying at Fawlty Towers, and Basil mistakenly thinks that the death is because of some kippers that were "off". After a frantic rush to get rid of the incriminating evidence, he finds out that the kippers aren't at fault, but now Basil has to find a place to put the body until the undertakers come; unfortunately, eveywhere he puts it seems to upset the guests who are still in the land of the living.
Basil and Sybil's anniversary is approaching; sure that he's forgotten it as usual, Sybil makes plans to go golfing with her friends. Basil, however, hasn't forgotten; he's planned a party and invited their friends; then has to explain why Sybil is missing from her own party.
Manuel has a pet: a Siberian Hamster; Basil, however, believes that the pet is not a hamster, but a rat, and orders Manuel to get rid of it before someone sees it... someone like the hotel inspectors who are coming around. Manuel loves his hamster though, and can't bear to lose it; unfortunately, this is exactly what he does. The hamster is loose in the hotel, and both Polly and Manuel rush to find him before either Basil or the hotel inspector sees it.