The yarn in your towel will have been ringspun or produced using the Open End technique.
If produced using the Open End technique, the fibres are "strung out" into threads without the use of a bobbin. This process is faster and cheaper than other spinning techniques because the fibres being turned into yarn don't need to be aligned beforehand.
Ring Spun yarn is more laborious to produce and involves more steps. The fibres need to be aligned using a process called "carding" before they are spun. Occasionally the fibres are also combed to remove short, loose or coarse fibres and to create a luxuriously smooth yarn. Ring Spinning involves twisting the fibres and results in a stronger and more durable yarn than one created using the Open End technique.
And what does all that mean for you? Ring Spun yarn is smoother and more durable, while Open End spun yarn is rougher and lower in price.