When retiling a bathroom you have to protect the walls that will get wet:
This is done with a waterproof material such as tiles or even wall panelling, but it is often not necessary to fully tile the rest of the walls in the room as can be seen in this article.
In other words, you can choose to tile the walls in the wet areas, whilst leaving the remaining walls plastered and painted.
PS Painting the walls with an anti-mould bathroom paint suitable for humid environments as well as ensuring adequate ventilation will help combat the problems associated with excess bathroom humidity.
In this bathroom, recently completed in Bardsey, the only areas to be tiled were those in the shower enclosure, behind the basin and around the bath as shown below.
Above you can see some pictures of the area around the bath that has been recently tiled, but not yet grouted.
The tiles have been levelled in such a way that any excess water will drain back into the bath rather than collecting at the window (where it could lead to problems with mould and silicon / grout discolouration.)
The finished tiled cill provides a useful storage area above the bath for toiletries.
The style of the tiling was kept consistent across the different areas to tie the design together i.e. all the tiles in the 3 distinct areas were orientated in portrait fashion (rather than landscape) and all areas included a stone border of uniform width.
To save time and money (or for a certain aesthetic) you may wish to only tile the wet areas of your bathroom, but if you do so, please make sure you take all necessary steps outlined in this article to deal with excess bathroom humidity as non tiled walls are not as forgiving as tiles to humid environments.