I've never been to Dali and I'm a little overwhelmed by all the hotel options. I'd like to stay in a hotel that is central and gives me good sense of what Dali is like. I'd love to know where locals tell their friends to stay when they visit, and why those areas and hotels are special. thanks!
Make sure you stay in Old Town Dali. From there you can bicycle, climb the mountain, or even rent electric scooters to tour the surrounding areas. There are literally hundreds of very nice guesthouses where someone can stay in Old Town. You may want to choose one for the first night or two and if you plan to stay longer you may find another yourself that you like better. Most guesthouses will cost anywhere from $35-$75 per night. I will list a couple here that are nice..., Sleepyfish Lodge Dali Five Elements Hostel, Dali Huai Ren Hotel (center of Old Town - a Hotel). There are also more than 100 guesthouses by Erhai Lake in the village of Caicun (2 miles East of the Old Town). I have lived in this village for the past 9 years with my family and most of these guesthouses are very nice. Cost is about the same as right in the Old Town yet the lake view is beautiful. Hope you have a fantastic trip!
Mentioned in this answer: