Great use of space. Just because a room is tiny doesn't mean it won't suffice. This is a very realistic guest room - it's a loft, space that might not otherwise be used often. But it's got great light, a comfortable bed and a nice chair tucked in the corner. It feels private, too, which is very important.
This is so Laura Ingalls Wilder, redux. What a cozy loft to retreat to, overlooking the ground floor. The tilted ceilings with great natural light illuminate this light space. Couldn't you curl up in that corner upholstered chair...
When your guest room is an entire little back-of-the-house cottage or apartment over the garage, use the space as your get-away spot, a distant-but-monitorable teen hangout spot, another place to finish that novel or bring over popcorn for a date-night movie.
I like the skylights. There's probably a crawlspace under the loft. In our attic, if we had a loft area, it would be shorter than the one in this photo. We could use the area underneath the loft as a crawl space or a play space, either of which could extend into the knee wall area.
I could easily do this in my guest bedroom, knock out the upper part of the wall and finish the attic and put the bed up there creating all open pace in the bedroom! That would be awesome!