This hotel has got many positive reviews from travelers. It is located right in the heart of the city opposite the clock tower in Norzin Lam. Not only is the Hotel Ghasel known for it's clean rooms and efficient service, it is also recommended for it's vegetarian restaurant! The restaurant serves Indian Thalis and Bhutanese cuisine at very reasonable prices with fast service.

As recommended by another traveler - 

Clean and pleasant rooms with attached bathroom and hot water facility, cable TV. Restaurant, bar and fast food facilities.

 (Source: Thimphu online travel guide) 

They do not have a website, but here is their phone number - +975 2 323-341.

You can visit the hotel's website here.

Their rates vary between NU3000 and NU7000

Here are a few reviews.

Wonderful and obliging staff..they make you feel like its home. Price is reasonable, good location in heart of the town. Rooms spacious.

Check in at Druk and all's taken care o (Source: TripAdvisor) 

Druk Hotel in Thimphu has been THE eminent hotel in this capital city of beautiful Bhutan. It is located in the middle of the town, by the open public space (the town square with the clock tower) and set back between the two main streets of cthe city. Check-in is smooth and your spacious room has the ambience of a Bhutanese home with traditional wood funtiture coupled with modern amenities, making it cozy and comfortable. The restaurant offers a variety of cuisine and the Chef is also ready to prepare a custom-made dish for you. There is the business center as well as the wi-fi in your room to seamless expedite your work-related needs, while the exercise room and the bar offer the spaces for some diversion. And then the hotel staff -- from the manager to the bell boy -- are always ready to help and guide, and during the whole stay there all's very wel taken care of!!

Review of Druk Hotel Thimphu (Source: TripAdvisor) 

For bookings and further information you can visit this link.

This hotel is located right in the heart of the city.

Sonam Trophel is a familiar and distinctive landmark, traditional wooden architect & paintings apart from the glass and concrete conformity of other hotels. There are 10 rooms including 2 luxury suites. The rooms are furnished with basic modern amenities including spacious attached baths with running hot/cold water, color TV with satellite channels, direct dial STD/ISD, laundry. WiFi connectivity and car parking is also available.

Paro travel guide - Wikitravel (Source: Paro travel guide - Wikitravel) 

here is their website - Hotel Sonam Trophel

Rates for double rooms start from 40 $

They have a restaurant which serves breakfast, lunch and dinner and also offers packed lunches. 

The Gangtey Palace Hotel is well known and many travelers have stayed here and given their positive reviews .

One says - 

Gangtey Palace is a beautiful old hotel in the traditional Bhutanese style. It is an amazing building to look at, and has a beautiful view of the Paro valley.

 (Source: TripAdvisor) 

Another traveler also recommended - 

Gangtey Palace it's a hotel rich in history. It's staff enhance the atmosphere with their warmness & friendliness. We had a huge room with beautiful traditional Bhutanese furnishings. We were nicely surprised, much more comfortable lodgings than we expected.

 (Source: - TripAdvisor) 

You can visit their website here - Gangtey Palace

Rates start from 29$.

This is Punakha's most popular hotel. Here is a review -

Upon our arrival, the staff could not have been more friendly, courteous and ready to please. Our cottage was clean, roomy, nice view...even had a little balcony. Everything worked and there was plenty of hot water. Beds were comfortable(the staff reconfigured our beds to put them next to one another).

TripAdvisor (Source: TripAdvisor) 

Tel : 00975 – 2 – 584125

This is also a popular hotel in town. It gives travelers quaint cottages to stay in and is very hospitable.

Situated on a hill top, the hotel is built in traditional style coupled with modern comfort. All 14 rooms are in cottage form, decorated beautifully.

The other facilities here include ; all rooms with attached bath, running hot & cold water, restaurant & bar, IDD telephone, money change.

 (Source: Trip to Bhutan.com Hotels) 

You can make an online booking here - Hotel Meri Peunsum

Highly recommended if you're looking to have 180 degree views of the valley and be away from the city center.

Excellent stay in a gorgeous location. Very friendly & helpful staff. Small wood stoves provided nighttime heating, and electricity had come to the valley only 2 weeks before our stay, so still a bit rocky in terms of electric service. Food adequate. Very comfortable beds, and staff will bring early-morning tea or coffee to your room, a definite plus on a chilly morning! HOt water bottles available at bedtime too, so be sure to ask for one!

Lovely hotel, rustic but comfortable - Review of Dewachen Hotel, Thimphu, Bhutan - TripAdvisor (Source: TripAdvisor) 

More at  - Dewachen Hotel

Rates start from 50$ for a double room but since you are going during the off season, you will get a 25% discount. 

Dewachen is the only hotel other than the swanky Amankora in the Phobjikha Valley.

Incidently this is also a really good hotel which you might want to check out here.

The Amankora boasts international fare and five-star service. Not surprisingly the hotels that primarily cater to Indian guests serve up good-value curries.

Amankora in Thimphu, Bhutan (Source: Lonely Planet) 

The chef was able to prepare fried rice and vegetable manchurian for us, even though it was not on the menu. Our vegetarian diet was not a problem because the chef prepared everything we asked for. The delicious food arrived promptly. All in all, Zhiwa Ling is a hotel with fantastic service in a beautiful setting. It was truly a delightful experience.

Zhiwa Ling Hotel, Paro Bhutan (Source: Zhiwa Ling Hotel, Paro Bhutan)