You could try curtains. They could be in a ring around the bed or along the opening to below. Alternatively, you could do a folding screen. That said, it will be more private than being in the living room.

Wow ! Thank you all for the ideas!!looks like a curtain should work. This is a great community. It’s actually a house I am making into a short term vacation home and wanted to give more options for sleeping arrangements should sb need extra space. The living room is not furnished yet.

Google ”studio apartment room dividers” for some ideas.

Candice Olson fixed a similar issue with curtains. HEAVY DARK curtains.

Utilize the architectural element of the sloped ceiling and corner wall to create a sleeping niche with bookcases on either side of bed - the bookcase on the wall facing the bed can serve as the nightstand for accessories and lighting sconces and the bookcase between the settee and the bed facing the settee for office accessories.

Indicated on the floor plan is a queen size bed. Separation for your guests for sleeping can be tailored curtains, sliding glass panels, a folding divider, or just left opened as the bookcases will provide privacy.

I don't see an egress window anywhere in this space. You won't be able to get a building permit without one. It's also a liability.

I've found that the most important feature of a guest room is plenty of outlets. My guests have phones, C-paps, laptops, all manner of things they want to charge near the bed, as well as bedside lighting (preferably on both sides).

The enclosed beds look very neat but they can be a PITA to make up since you can only access the whoe bed from one side or even only a part of one side.