Use a clean, standard size cutting board to fold your bath towels and a smaller size cutting board for your hand towels. Lay the towel out on a flat surface and place the cutting board in the middle. Fold the towel lengthwise across the cutting board, carefully lining up the edges. Ensuring the cutting board is centered, now fold the towel inward so that it overlaps in the middle over the board. Remove the cutting board and you have a perfectly folded towel ready to display.
A nice touch when you have guests is to display a neatly folded set of towels using a large ribbon. First, arrange the towels where you want them displayed. This can be on the end of the bed with a welcome card tucked into the ribbon, or on a shelf in the bathroom. Either way, stack two bath towels on top of one another, followed by two hand towels, and finally two wash cloths. When done, slip a thick strip of fabric ribbon underneath the middle and wrap it up to the top, tying it in a bow on top. You can also add a mint or candy on top.
If you want your towel to look decorative while hanging on a rack you must fold it right before hanging it. Lay the towel out on a flat surface and fold it in thirds with the towel lying lengthwise. This means turning both of the edges inward until they meet in the middle. In this way, when the towel is hung there are no visible edges displayed.
You can create origami designs using towels instead of paper. If you've ever stayed in a luxury hotel or ridden on a cruise ship you've likely seen towel origami. In some cases a towel swan might be on your bed next to a gift basket or a towel rabbit in your bathroom next to the sink. Towel origami can be done with a little practice and there are lots of books and guides available. To get you started, designs that you can download are listed in the Resources section below.