"في ٱلْطّابِق اَلْأَوَّل حَمّام."
Translation:There is a bathroom on the first floor.
It refers to the first floor above street level. The ground floor would be الطابق الأرضي. Literally the "earthly floor" :)
Because Duo uses American English in the main translations and the translation shown is "first floor", I assume it probably means the floor at street level.
In Arabic, when the subject of a nominal sentence (one whose English translation uses verb "to be") is indefinite, the predicate is moved to the beginning of the sentence. So "حمام في الطابق الأول" wouldn't make any sense. Compare how in English, you would say "On the first floor is a bathroom." but not "A bathroom is on the first floor."
Thank you for the reply and excellent grammar note.
Clarification on the English examples on last two lines: English has no problem(grammar, syntax, or usage) in saying, "A bathroom is on the first floor". It is a declarative sentence.
Example: A young child finds the doorman outside and states, "Excuse me sir, I need a bathroom." "A restroom is on the first floor", replies the doorman with a gentle smile. In American English you can produce subtext with word selection, colocation and syntax/word order. I had thought this was possible in the Arabic language also, however, not necessarily direct correlation exists in both languages. Such as, the same word order in both languages may not produce a subtext or inference with a common meaning (if any meaning other than the speaker is not native) or effect upon the receiving party/audience. It could be useful to know that this exists in the Arabic Language, if it exists: Communications to inform, Communications to relate, Communications to influence...