When it comes to Christmas entertaining few of us can face the scale of interior-design difficulties encountered by Elizabeth I's courtier, Lord Burghley, who moaned after one of her many visits: "Upon fault found with the small measure of her chamber (which was in good measure for me), I was enforced to enlarge a room." Nonetheless, even for those of us with less demanding house guests, it can be a trying time of year.

In countries with wide open spaces and houses to match, putting up guests is less of a chore. But in cramped Europe, the UK in particular has always had a problem when it comes to accommodating visitors. You will note, that the word for the room in which the British house their guests is the "spare" room - no notion of hospitality comes into the term.

But visitors who expect an en suite bathroom and attractive bedding, rather than the offer of a comfortless attic or a hard sofa in the study, are making themselves felt in Europe.

"I think in most respects things have definitely got better," says Nina Campbell, the renowned international designer and interior decorator. "All those awful, bleak rooms with too-thin curtains and a bathroom down a draughty corridor have disappeared. But then, too, so have some wonderful things.

"When I was in my 20s, I used to stay at a house in Norfolk, where they would leave a hothouse peach by my bed with some cream, in case I was hungry before dinner, and would prepare a basket for my dog with a bowl of water and a dish of minced turkey beside it."

If this considerate individual attention to detail has perhaps declined over the past 30 years, the desire for a designated space to entertain guests and the efforts put into furnishing it have certainly moved up the scale of priorities.

"People are far more conscious of what a house looks likes as a whole," says interior designer Carol Bennett, of Designed Interiors. "My clients may spend slightly less on the fabric for the spare room than they would on that for the master bedroom, or put in a less luxurious bath, but people want their spare rooms to be of the same decorative standard as the rest of the house."

In smaller houses and flats in London, the room for guests will often double as the room for paying bills, working at the computer, or watching television, and the way it is designed will have to be carefully thought through to make it as versatile as its multiple functions demand.

Gail Taylor of the Taylor Howes design partnership recommends blending in the colour scheme with that of the rest of the house and leaving the door open to ensure the room is always part of the overall space.

"Spare rooms can sometimes seem cold, both literally and metaphorically, so I try to use a nice, warm colour scheme, and even if the room is not used that often I recommend keeping the heat ticking over. If the room has a dual purpose - for a work station or study space - I might hide the working area behind sand-blasted glass or cupboard doors. And, since guests will only need a few hangers and a drawer, the spare room is also the ideal place to put in as much extra storage as you can manage."

However tight you are on storage space, however, Nina Campbell is firm that the temptation to purloin all the storage for your own belongings must be resisted. "Keep part of the cupboard sacrosanct for guests, otherwise you'll end up with the room looking a terrible mess whenever you have anyone staying."

One of the problems of the multifunctional guest space is the dearth of versatile furniture available to cope with its restrictions. "The dilemma of the spare room has always been whether you commit to putting a whopping great bed in it, or make the compromise of putting in some folding bed, which tends to be both ugly and uncomfortable to sit on," says Gareth Williams, curator of 20th century furniture at the Victoria & Albert Museum.

He feels that, on the whole, technology has made few advances in space-saving sleeping furniture, though he is a fan of the talented French designer Matali Crasset, who has managed to compact a full-sized double bed - plus reading-light and clock - into a 1ft-square tower. The bed is aptly named "When Jim Comes to Paris" (Quand Jim Monte à Paris).

Even if you abandon the notion of the occasional bed, you do have to think carefully about how to scale the furniture. "A lot of spare rooms are really too small for a double bed," says Carol Bennett. "It's better to put in a single bed, rather than overpower the room. You can always add a sofa-bed in the drawing room."

In the country, of course, space is less of an issue, and longer- staying guests should expect a greater degree of comfort. "A sofa-bed might just about be tolerable in London where people doss down for the night, but it's not acceptable in the country," insists Nina Campbell. "If you're coming down for a jolly weekend, you expect to be cosseted. I always put a desk in a spare room and some books, and a bedside table with a light, so guests don't have to get up to turn off a central light."

Architectural designer Richard Parr agrees that guest comfort should be of a high standard. "It's no fun at all being put up in conditions inferior to those you live in at home, and the smaller the house the more important it is to give some sense of independence to your guests."

To shield both guest and host from unaccustomed noise, Parr always tries to create an acoustic barrier, even in the smallest of spaces, by positioning bathrooms or wardrobes back to back. "A cupboard full of clothes can be a wonderful sound insulator."

In design terms, he feels that too often the spare room is a missed opportunity. "You have far fewer constraints if a room is used only occasionally. Instead of a graveyard for unwanted tat, it can be the most marvellous fantasy space."

He himself has created a marvellous fantasy space in a small outbuilding in the garden of his Georgian family house in Gloucestershire, transforming a derelict stone structure 25ft by 10ft into a light and airy, chapel-like studio, with its own minimal kitchen "enough for breakfast" and platform sleeping area with recessed mattress.

"If you don't give people their own space, then inevitably they're going to live in yours. Being a guest can be as difficult as being a host and you have to offer something more than just a bed and somewhere to put your bag on the floor."