Sometimes hooks are more efficient because due to lack of space on the wall. They may not dry your towels as well as a towel bar though. There is always the question of whether to center the towel bars or hooks in the middle of the wall for aesthetic value or have them closer to the shower for functional convenience.
I personally like to be able to reach my towel when I get out of the shower because I want to dry off before I step foot on the rug. If you have only a few people sharing that bathroom then towel bars are better since they dry the towel faster. However, if more than two people are sharing (in the case of kids) or you don't have enough wall space, then you might want to consider the hooks.
Don't forget a hand towel for the sink area which can either lay on the counter, hang in one of those stand up holders or if you have enough room hang a holder on the wall.
Nowadays, many people like rolling up towels as decorations in a basket or shelf. Plus that's storage and you don't have to utilize some other space if you are short on it.
The important thing to remember is you need a place for each wet towel to dry. Did you create a unique idea on how to hang towels or have a supply of them on hand in your small bathroom? Please share it with us!