Several years ago I made poncho towels for the kids in my family. They are just now really benefiting from the poncho towel and we constantly get compliments, so I thought I would let you know about them.
I purchased a beach towel. Cut a hole (large enough for their head) in the middle and attached cotton ribbing fabric. This easily a 20 minute project.
Now when the kids get out of the water shivering they can throw the towel over their head and not have to worry about holding it up. It's also great for parents because you no longer have to carry their towel.
Beach towels will be going on sale soon and it would be a great time to pick some up to make for Christmas or birthday gifts.