When we were designing our house 6 years ago, Real Simple happened to run a piece about bathrooms (or order or life with children?) and they mentioned this tip which we used in our home.
In kids bathrooms- skip the towel bar and go with individual towel hooks!
Let's be honest- most adults can barely fold their towel in half in order to hang it neatly on a towel rod- so its even more difficult for children! Why not make it easier for them by using hooks instead? And, you can fit more towels on a wall with hooks than you can with a towel rod. You can easily stagger the hooks so that the littler kids have a hook lower to the ground, whereas the big kids' hooks can be up higher. And as you add more children to your family, you can add more hooks! We bought extra hooks for that purpose when we bought all of our bathroom fixtures.
These are the towels in the boys' bathroom. Here is a post where I explain the "different colors for each kid" method of bath towels. I wrote that post 18 months ago and the method is still working great for us!
Don't forget to click on the "order" label to see the other posts in this series!