Obviously it is much smaller; I did this one with L in mind so its more childsize but still has room for her to help out by carrying her swimsuit or other small toys. It could easily be made larger by using the full hand towel (unfolded) and at another on top if you still want pockets.
The short and sweet version of how I did it:
Folded the hand towel in half and sewed up the middle to make the pocket.
Sewed it onto the bottom corner of my towel.
Sewed on the ribbon strap (though in hindsight, I should have done this to the hand towel first thing-it would have been much easier).
The towel is folded up into the "bag". I fold my towel in half, and then half again.
Then fold in thirds (I think) so all the towel is behind the pocket fabric.
i put my hand in the pocket, grab a corner and the folded up towel with it, and turn it inside out. Repeat with the other corner and smooth everything out!