Bathroom wall tile height is an important subject and speaking of design there is a new way and an old way. The new way utilizes the modern aesthetic open floor philosophy while the older way gives the house a more contemporary or Victorian era look (the classic design feature is usually between 34 and 54" high, with 36" being the average height.).
The bathroom wall tile
height for modern designed houses is up to the ceiling or almost to the top. Generally it tends to go up to the top of the shower with this design and the usual height is 1.5 feet below the ceiling.
Going all the way up to the ceiling makes up the most of the modern aesthetic look and you can choose between tiles to be place vertically or horizontally considering your design taste.
Small bathrooms normally want an usual height of 36 inches (the level of sink), this not to give a claustrophobic appeal, but you have to consider that it is very common to get an accidental splash on the walls. So going with a fully tiles bathroom wall is the best way to prevent any unnecessary paint jobs on a regular basis and you can also place tiling on the ceiling in the shower.
For a small bathroom it is further advisable to place the tiles vertically instead of horizontally as this would make the smaller space look taller than usual. It will prevent your eyes from constantly seeing the small bathroom as a claustrophobic space which usually happens when you place the tiles horizontally.