As far as where to stay in Bhutan goes, I stayed in one of the wooded cottages at the Olathang Hotel in Paro, Hotel Riverview in Thimphu and in some small guest houses. The accommodations were basic, but adequate. There are many new options to consider with many opening in the last few years.
Since I was there Amanresorts has built Amankora, which is a series of lodges throughout Bhutan in the valleys of Paro, Thimphu, Punakha, Gangtey and Bumthang. Taj Hotels also has the Taj Tashi in Thimphu. Uma Hotels has a beautiful boutique hotel in Paro known as the Uma Paro and recently opened one in Punakha, the Uma Punahka. Wallpaper* Magazine included the larger, 78-room Le Meridien Thimphu in their list of ‘Best Urban Hotels’.
I have also read good things about the Gangtey Lodge in the Gangtey Valley if you are further afield. There is also the Druk Hotel Thimphu and Le Méridien Paro – Riverfront. The new property marks the opening of the luxury chain’s second hotel in the country, following the successful opening of Le Méridien Thimphu.