NOTE: This spoiler was submitted by Jeremy.

The film starts with Sonny Kapoor (Dev Patel) and Muriel Donnelly (Maggie Smith) driving down Route 66 in San Diego, California. They meet with a hotel magnate named Ty Burley (David Strathairn) to discuss plans for opening a new hotel in India since their current Best Exotic Marigold Hotel is full up, and none of the guests plan on leaving until they die. Burley tells the two that they will be visited by an inspector to check on the status of their hotel.

The guests that stayed at the hotel have carried on with their lives in Jaipur. Douglas Ainslie (Bill Nighy) works as a tour guide having information fed to him by a local boy. Evelyn Greenslade (Judi Dench) also has a new job and is on the verge of accepting a new position in Mumbai, though she is concerned with the possibility of constantly traveling at her age. Douglas is still in love with her, though their relationship is complicated. Madge Hardcastle (Celia Imrie) has her eye on two potential suitors. Norman Cousins (Ronald Pickup) is in a relationship with Carol Parr (Diana Hardcastle). During a drunken ride home in a taxi, Norman comments on what he would do if Carol were not around. He hands the driver some money and goes off. This comes up again later when Carol is nearly struck by a taxi until Douglas pulls her out of the way, leading Norman to think he gave the driver the idea to kill Carol.

Sonny and Muriel return to India in preparation for Sonny's wedding to Sunaina (Tina Desae). Sonny is displeased to find Sunaina's friend Kushal (Shazad Latif) there to help teach them their wedding dance, as Sonny feels a bit inferior to Kushal.

Two new guests arrive at the hotel - Lavinia Beach (Tamsin Greig) and Guy Chambers (Richard Gere). Sonny assumes Guy is the inspector since Burley told him he would send his "guy" to check on the place. He tries to make Guy's stay there exceptional, which means he totally ignores Lavinia. Sonny brings Guy, along with Sonny's mother (Lillete Dubey), to the location for the second hotel, only to discover that Kushal has already bought the building, to Sonny's frustration.

Muriel goes to the clinic with Madge. As Madge talks to a man with his niece, Muriel comes out from the office looking as though she just received some bad news.

Douglas receives a visit from his daughter Laura (Claire Price) and his estranged wife Jean (Penelope Wilton). Jean mentions her new boyfriend Daniel and says he has proposed to her, so now she wants to divorce Douglas.

At the engagement party, Sonny becomes more preoccupied with pleasing Guy, who has become smitten with Mrs. Kapoor, than he is with sticking with Sunaina. He is also still angry with Kushal for buying the building, and even more so when Kushal tries to convince him to join him in co-managing the hotel, which Sonny rejected. Madge kisses Norman in front of the two suitors, getting her nowhere. To make things worse, a power outage occurs during the dance, moments after Sonny accidentally drops Sunaina.

Evelyn travels with her business partner to Mumbai for a deal. The loan officer initially attempts to reject the request as he chastises Evelyn's partner for working with a white woman. Evelyn responds in their native language to say that she understands every word he's saying and that he should respect his elders. The man agrees to the deal.

Norman sees that Carol has gotten into the taxi with the driver he met the other night. Fearing the worst, he follows them in another taxi. He catches up to the driver and realizes that there are multiple taxis with the same scorpion design on the back, and furthermore, the incident from the other day may have been attributed to the driver having one eye. Norman then follows Carol into a hotel to see that she is joining another man.

Guy has dinner with Mrs. Kapoor. He tells her that he is a writer trying to work on his new story. He says it involves a woman that doesn't easily trust people, least of all herself, but the man in the story knows there is more to her than she lets on (he is obviously talking about the two of them). They then get a room together. Sonny runs by later and catches the two of them. He figures that Guy is not an inspector, as Muriel tells Sonny that it is really Lavinia. Muriel heard her slip from an English accent to an American one earlier, and Lavinia admits her real name is Teresa. She comes from an inspection company that is the competitor to Guy's company, since he really is an inspector. Mrs. Kapoor feels lied to and leaves him. He later resigns from his position since it's been compromised.

Muriel convinces Sonny to not pity himself for his mistakes, so he decides to makes things right with Sunaina. He promises to be a better husband than he is a fiancee. He also finally agrees to go into business with Kushal, for the sake of Sunaina.

Norman talks to Carol about seeing her with another man. She admits to having multiple affairs, but only because she thought Norman was doing it as well. They reconcile.

Sonny and Sunaina have their wedding, with all their family and friends in attendance. Douglas goes up to give a speech on love with help from the kid, but Evelyn shows up in time to give him a better speech (he's tanking), and allowing Douglas to realize he has to go after Evelyn. Meanwhile, Madge gives up her pursuit of the suitors and goes on with herself, and Evelyn learns that Jean was lying about being engaged, or even being in a relationship, but she is still trying to move on from Douglas and accept that he's moved on as well.

Sonny invites everybody to the reception, which is taking place at what is now the Second Best Exotic Marigold Hotel. Muriel skips the reception, as she knows it would be time for her to say goodbye (it's all but explicitly stated that she's dying). She leaves Sonny with a note that encourages him to continue living in the moment with his loved ones.

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