The book starts off where The Grim Grotto left off. The Baudelaires are traveling with pregnant Kit Snicket in a taxi to the Hotel Denouement and after serving them some lunch, she leaves the Baudelaires to start their new jobs as flâneurs, with concierge uniforms to use as disguises. The siblings meet Frank and Ernest, the identical twin managers. The Baudelaires are expected to serve and help the people of the Hotel, and in particular learn whether the mysterious “J.S.” is helping V.F.D. or its enemies.Three bells suddenly start ringing at once, leaving the three Baudelaires no choice but to split up.Violet goes to the rooftop sunbathing salon, where she encounters Esme Squalor (Count Olaf’s villainous girlfriend), Carmelita Spats, and Geraldine Julienne, a Daily Punctilio reporter who prints up lies about the Baudelaires. She eavesdrops on Esme and Geraldine discussing a cocktail party which J.S. supposedly will try to spoil, but is cut off when Carmelita orders Violet to get her a harpoon gun. She overhears Esme let slip a piece of information which was to watch the skies when she and Geraldine were discussing fashionable eyewear.Meanwhile Klaus encounters Sir and Charles (from The Miserable Mill) and takes them to the sauna. Eavesdropping on their conversation, he overhears them talk about a party on Thursday, and someone with the initials of J.S. However, Ernest enters the room and in asks Klaus to hang a flypaper-like roll of sticky paper outside the window, in order to catch and trap any falling birds.At the same time Sunny meets Vice Principal Nero, Mr. Remora, and Mrs. Bass from The Austere Academy. She leads them to an Indian restaurant in the hotel, run by Hal from The Hostile Hospital. Sunny also secretly listens in to a conversation by Hal and either Frank or Ernest. They too discuss J.S., but then spot Sunny. The person, who is neither Frank nor Ernest, but their brother Dewey, gives her a lock to create a Vernacularly Fastened Door and has her put it on the laundry room door.That night, the Baudelaires puzzle over how Frank and Ernest can be in three places at the same time. Finally, Klaus deduces that a crow will bring the sugar bowl to the Hotel. It will be shot down by the harpoon gun, fall onto the flypaper, and drop the sugar bowl into the laundry room vent. All of a sudden, they see a man descending from the ceiling of the Hotel. They think it is Ernest or Frank, but it turns out to be Dewey Denouement, the third triplet, whom was the one Sunny encountered. Klaus had encountered Ernest, who wanted the birdpaper hung to catch the crow for the villains. And Violet had encountered Frank, who slyly tried to tell Violet not to give the harpoon gun to Carmelita by saying “Are you sure a harpoon gun should be given to a young girl on the roof ?”Dewey tells them that there is a duplicate of the Hotel at the bottom of the pond, containing a catalogue of all the secrets of V.F.D., which he has spent his entire life collecting. Then Justice Strauss and Jerome Squalor, who both believe that they are the J.S. being contacted, arrive by taxi. Justice Strauss has been working with the High Court to help the Baudelaires, and Jerome – who also felt bad over how he treated the orphans – has written a book on the matter called Odious Lusting After Finance, in order to bring more attention to Count Olaf’s treacherous misdeeds. The High Court justices are coming to put Olaf and the other evil people of V.F.D. on trial and so—on Thursday—all of the noble people will arrive to give evidence.Re-entering the hotel, they encounter Count Olaf who says that the Hook-handed man and Fiona stole his submarine. Hugo, Colette and Kevin, the three carnival freaks who joined Olaf in The Carnivorous Carnival, all arrive. Olaf also hints that the Baudelaire’s own parents were not noble, and that they had something to do with a box of poison darts in an opera. Later, it is said that the poison darts were used to kill Olaf’s parents, which Kit and Lemony Snicket say they were involved in, at the “fateful night at the opera“.
Dewey tells Olaf of the catalogue he has made, which prompts Esmé to comment that he must already know what is inside the sugar bowl, and why it is so important. She also mentions that Beatrice stole the sugar bowl from her. Olaf takes the harpoon gun from Carmelita and threatens Dewey. The Baudelaires shield him and approach Olaf as he counts to ten, however he is interrupted by the distinctive coughing of Mr. Poe, who has come from his room to investigate the loud noises. Count Olaf quickly shoves the gun into the Baudelaire’s hands.
Not expecting it, the Baudelaires accidentally drop the heavy gun to the ground. It discharges, and a harpoon impales Dewey, inflicting a fatal wound. As he dies he thinks of Kit Snicket who is the love of his life, and is now carrying his baby.Dewey stumbles out of the hotel and the Baudelaires watch as he sinks into the pond. Justice Strauss’s taxi driver – an enigmatic man smoking a cigarette – talks to them, but they cannot tell whether he is a volunteer or a villain, and they realize they cannot leave the scene of the crime. As the entire hotel is quickly awakened, the Baudelaires walk back into the hotel, and the taxi driver drives the cab away. Justice Strauss breaks the ensuing chaos up by demanding that the accused must be brought to justice in a legal trial, and both the Baudelaires and Count Olaf are locked in separate rooms until the trial.
It is early Wednesday morning when the Baudelaires go to bed, and they wake in the afternoon where they are returned to the lobby for the trial. In the trial, the phrase “justice is blind” is taken literally, everyone except the judges are blindfolded.
The trial begins and Olaf gives a brief speech where he states his innocence. The Baudelaires, however, are beginning to question their own nobility and morality and so they answer that they are “comparatively innocent”. When Justice Strauss stops commenting in sentences, the Baudelaires get suspicious and remove their blindfolds to discover that the other justices are Olaf’s villainous associates: the man with a beard but no hair, and the woman with hair but no beard. Now discovered, the false judges and Olaf flee with a bound and gagged Justice Strauss to be chased by the Baudelaires to the elevator, while telling everyone else to take off their blindfolds.
Realizing that they need to follow Olaf, both to stop him from getting away and because there are authorities at the door of the hotel, the Baudelaires go with him and Justice Strauss in the elevator. Olaf goes downstairs to the laundry room, believing the sugar bowl to be inside. Using three clues, they break in, only to find that the sugar bowl is not there. Angered, Olaf declares that he is going to the roof to get the specimen of Medusoid Mycelium which he will spread through the hotel, killing everyone. He will then escape, by jumping off the roof in a boat. Violet, realizing his plan is foolish, agrees to help. Klaus is surprised that she would do this, but Violet knows that they also need an escape route, and going with Olaf may be the only way. Sunny then abruptly suggests that they burn down the Hotel, and Olaf agrees. Olaf then uses chemicals and a match to light sheets from a laundry room on fire. Then the fire spreads on the chemicals, and when the Baudelaires try to use stairs, Olaf demands they use the elevator.
As the elevator goes up, the Baudelaires use a trick their parents taught them and press all of the buttons so the elevator stops on every floor. This gives them and Justice Strauss an opportunity to warn all of the guests of the fire. However, the other guests are still blindfolded from the trial, and Olaf shouts that the fire warning is fake. Mr. Poe returns and when he starts taking the elevator, Justice Strauss and the children try to warn him of the fire. Mr. Poe refuses to believe them and uses the elevator, so it is possible that he dies in the fire. The narrative does not reveal which guests believed the Baudelaires and which believed the Count, but hints that many of them died in the fire. It is also stated here that the Baudelaires will not see Esmé, Justice Strauss, Mr. Poe, or Carmelita again. This perhaps reveals that they all died in the fire, along with others.On the roof, Klaus reveals that the sugar bowl fell into the pond and not into the laundry room. Here, Violet deduces that Sunny suggested they set the Hotel on fire as a signal so that noble people like Kit, Hector and the Quagmires would cancel the meeting. As Sunny says, “the last safe place is safe no more”. Violet makes a chute for the boat to safely make it off the building, and they use the giant spatulas used for flipping sunbathers as oars. Justice Strauss attempts to stop the Baudelaires leaving on the boat, but Sunny bites her hand and makes her let go. The boat floats safely down to the ocean, and the Baudelaires are left both literally and figuratively adrift “in the same boat” as Count Olaf. Flames engulf the Hotel Denouement, and Justice Strauss is possibly killed in the fire.