The staff of Maplin's Holiday Camp assembles for the new season to find a university professor as entertainments manager.
Jeffrey is implicated when Ted is spotted entering a chalet with a girl camper.
Jeffrey is called on to judge the Holiday Princess Competition. Meanwhile, Ted teaches Spike how to make the most of the campers' generosity.
Mr. Partridge's drinking is getting worse, and Jeffrey's untimely decision to give him a pay rise doesn't help matters.
Fred's past comes back to haunt him, causing the staff - Peggy and Spike in particular - several difficulties.
Joe Maplin ordains that each Thursday should be Sunshine Smile Day, encouraging Ted to indulge in a money-making scheme.
Jeffrey's marital problems start to interfere with his work, and scandalous rumours are soon circulating around the camp.