The Inn by the Sea is a seaside inn operated by Natsuhiko. It is located in a beach town which was plagued every summer by the spirit of a bathing suit that Natsuhiko had failed to compliment when he was much younger. Unable to rest in peace, the spirit would supposedly drag pretty girls into the sea and the the town gained a reputation for being unsafe during the summer, resulting in no one visiting.
When the Tendos and Saotomes visited, they were unaware of this situation and stayed at the inn. Here Natsuhiko and several representatives met with Genma Saotome and Soun Tendo and informed them of the "monster" which was causing them trouble. They agreed to take it on and had Ranma handle this because the monster would only attack women.
After Ranma found the shrine the spirit was residing in on the sea floor and destroyed it, she was possessed by the Cursed Bathing Suit and woke up back at the inn. After Genma tried to cut it off, the swimsuit told its tale as well as gave a deadline of one day for it to be complimented by Natsuhiko or else Ranma would be taken back to its shrine. Natsuhiko turned out to be the innkeeper when his name was yelled out, but the swimsuit refused to acknowledge him because he had aged. Tatewaki Kuno then unexpectedly appeared at the inn and the spirit thought that he was was Natsuhiko as Kuno greatly resembled him when he was younger. Female Ranma had to chase Kuno after he fled the inn when the spirit destroyed the swimsuit he proposed that the pigtailed girl wear, but he later complimented it at the end of the following day. Back at the inn Kuno and Natsuhiko proposed rival swimsuits for Ranma to try on.