How to repair hole in sheetrock
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How do I patch a hole in a non textured sheetrock wall?
How to repair hole left in wall by old intercom removal
The hole is in the sheetrock in our guest bedroom, near the wall switch. The wall is textured too.
Looks like you've already used an anchor to secure it to the wall, so I would suggest getting a bigger anchor to secure it. It'll make it easy to have it in the same spot you already had it.
Let the patch dry and apply a second coat of compound if needed.
Even repairing the hole you would not be able to hang in the same spot. The patch would be too weak. Best would be to get a toggle bolt and use the same hole to remount the towel bar.
I would just remove it and put it an inch higher, They have lot of videos how to's on Youtube
Piece of cake! 1. Get a box of wooden toothpicks. Cover each one with "Gorilla" wood glue. Force as many glue covered tooth picks into the hole as you can. Let the glue dry for a couple of hours then screw the wrack back in.
Using the same hole, William is right. A toggle bolt is your only option if you are not wanting to repaint. Plus it will make it stronger. But remember, if it gets pulled out again with the toggle bolt, it will make a much bigger hole!
You might consider a combination towel/grab bar. Find one with a larger mount surface to cover the hole better.
https://images-na.ssl-images-amazon.com/images/I/31uTxfJwfyL._SY300_.jpg
There are some awesome tutorials on You Tube & both HGTV & DIY websites.
The patching with the joint compound is a good idea. Only $1. At Dollar Tree. Then you will have to remount both sides an inch above, or below the original site. Not hard!
I'd go with larger diameter molly bolts and screws, but you could also mount a thin piece of wood over the current holes, then paint and attach the towel rack to it.
Get a piece of dowel that's bigger than the opening, gently force (or hammer it in). Then all you need to do is drill a new hole on it for the screw.