Make a Room
If you don't have a guest room, convert a space into a bedroom you would be comfortable sleeping in. A large walk-in closet works, or give up your living room for a few days to make your guests feel at home. Consider a child's bedroom, or even a dining room will do. If there's floor space in any room, there's room for a guest. If you're really short on space, a room divider with a few extra home accessories can create the illusion of an extra room in any part of the house.
Make a Bed
A day bed or futon are both functional as guest beds and extra seating when you don't have guests. Bed toppers work well to make a couch feel more like a bed than a sofa, and it takes up little real estate in the closet. When space is an issue, with or without guests, consider an air mattress. It is a reliable substitute for a bed, can be easily moved in and out of any room, and takes up little storage space when deflated.
Make It Comfortable
When you're selecting a room to convert, stow away any loose knickknacks. This makes the room a more sterile environment so your guests don't feel like they're invading your space, and it gives them a place to put their own things.
Make a Closet
If you don't have an extra room, you likely don't have an extra closet, either. In that case, create a makeshift closet with a coat rack or over-the-door hooks and hangers so guests have a place to hang their clothes. The top of a trunk or ottoman can act as a luggage rack for their bags, so they won't need a dresser drawer.
A lack of space forces you to be creative with your home. Rearranging your furniture doesn't have to be stressful. Just remember, if your guest is comfortable, you'll be comfortable.