Mr. Moseby announces that London's dad, Mr. Tipton is selling the ship and that it will be dismantled within a week.
After assigning the class to write their own play, Ms. Tutweiler selects Cody's play to be presented in class. However, Bailey refuses to participate after realizing the play antagonizes her role in the break-up between her and Cody, forcing Cody to act as Bailey and Zack as Cody.
London's magic mirror takes her to a Christmas past, present and future, and realizes something which may change her forever.
Cody shows Woody's sister around the ship. Meanwhile, London hires a double to do her chores, but she falls in love with Zack.
London and Woody go to a posh beach club for senior ditch day, but when the bouncer won't let Woody in, London and Zack go without him. Meanwhile, in an effort to keep their perfect attendance records, Bailey and Cody show up for class, which annoys Ms. Tutweiller who was looking forward to her day off.
When the ship is docked in New Orleans, Mr. Moseby tells the tale of the ghost of Captain Entenille, whose old steamship, the Jessie Belle, sunk 150 years ago. His spirit makes contact with Zack, sending him on a mission to prove the sinking of the old ship wasn't the captain's fault. Meanwhile, London and Bailey try to help Moseby overcome his fear of performing in public.
Arwin comes on board the SS Tipton to improve the ship by adding a robot. However, problems start to occur when it begins to have feelings for Cody. Meanwhile, London and Woody enlist Zack's help to pass a gym class.
Zack, London, Woody, and Maya are all trapped in London's shoe submarine with only enough air for thirty minutes. Meanwhile, Marcus helps Cody prepare to play chess against a beautiful Russian junior champion.
Zack and Cody Martin are aboard the SS Tipton, a luxury passenger cruise liner owned by London's father. The ship cruises the world with tourists and students who attend classes at Seven Seas High, the one high school that London's dad thinks will make his daughter a better student. While out at sea, Zack and Cody still have their compass pointed towards mischief, and London learns to live a "fabu-less" lifestyle, including sharing a small room with Bailey, a country girl from Kansas.