If I use a guest bath, I do not want to use cloth towels since I don't have any idea of how they have been used.
In a guest bath, I would opt either for paper guest towels or relatively inexpensive white washcloths rolled in a basket that can be used by guests one time. Amazon sells such white Terry cloth wash cloths inexpensively or paper guest towels in a container are the alternative.
I think hung hand towels only make sense in bathrooms for a family where each person would have their own hand tool.
Q