Deliberate mistake: In nearly all the episodes that the front door of the hotel is open we see a painted board that is meant to be bushes or something outside. Yet whenever we see scenes from the outside of the hotel there is no sign of any trees or bushes.
Revealing mistake: Whenever somebody closes a door, leans against a wall, or goes up/down the stairs and brushes against the wall, it wobbles, revealing that the walls are lightweight stand-up props.
Answer: A possible explanation can be found here: http://tviv.org/Fawlty_Towers/Waldorf_Salad Quote: "This is, of course, sarcasm, as southern California in general and Los Angeles in particular is famous for its palm trees".
Mortug