The Facts: Lijiang
The easiest way to get to Lijiang is to fly from Beijing. There are two tourist offices--one on Shangri-La Road (Tourism Building, fifth floor; 86-888/512-3432), the other in the Old Town (Tourist Service Center; 86-888/511-6666). Both can recommend English-speaking guides or drivers. But you're likely to get the best guides by asking at your hotel.
In northern Yunnan province, the rainy season runs from June to September. The rest of the year makes for more pleasant travel. Lijiang's Torch Festival, a traditional Naxi holiday celebrated with massive bonfires, takes place on the 24th day of the sixth lunar cycle (generally in July). Another major Naxi holiday is the Sandou Festival, when candlelit boats float down the Old Town's canals in memory of a Naxi hero, held annually on the eighth day of the second lunar cycle (usually in March). Lijiang is also a spectacular place to spend Chinese New Year (in late January or early February)--its residents seem to be among the most enthusiastic fireworks consumers in all of China.
In both Lijiang and Dali, the top-end hotels are rarely full; travelers should request discounts when making reservations. Lijiang's only luxury property is the Guanfang Hotel (86-888/518-8888; doubles from $120). A good traditional alternative is the Ancient Town Inn (86-888/518-9030; doubles from $30), a courtyard complex in the old part of the city. Dali's best hotel is the Asia Star Hotel, or Yaxing Da Fandian (86-872/267-9999; doubles from $108), at the foot of the Cangshan Mountain range. Dali's Old Town has several courtyard hotels that are less comfortable but have more character than the Asia Star; these are favored by younger travelers. The Old Dali Inn (86-872/267-0382; doubles from $15) is a good bet.
Compared to the cuisine in other parts of China, the fare in Lijiang and Dali is bland and somewhat heavy. But inexpensive cafés that can be found in each city's Old Town offer fusion cooking that combines local elements with Western, Chinese, and Tibetan flavors. In Lijiang, Mishi Café (52 Mishi Alley; 86-888/518-7605) serves Western and local dishes (the owner, A Hui, speaks English) and Sakura Café (Xinhua Rd.) combines traditional Naxi cuisine with Japanese, Korean, and Italian food.
ROUND DALI AND LIJIANG
A number of villages around Dali have weekly markets. One of the best is held Mondays in Shaping, 19 miles north of Dali. Hotels and cafés in Lijiang rent mountain bikes, an excellent way to see the countryside (although the altitude makes for a challenging workout). Take the road north of Lijiang to the villages of Baisha and Nguluko, Joseph Rock's former home. Baisha has become something of a tourist trap, but neighboring Shuhe is relatively unspoiled. In Shigu, boats leave the dock twice a day for Tiger Leaping Gorge (the journey takes a little less than an hour each way). The region's best-known hike is also around the gorge. Cafés and hotels in Lijiang sell maps for the two-day trek; hikers spend the night in Walnut Grove, a tiny village that faces the sheer cliff wall of the gorge. You can also drive along the gorge on a recently constructed road, just north of Shigu.
The drive from Shigu to Xiang Ge Li La--formerly Zhongdian--is spectacular, crossing the Yangtze just before Tiger Leaping Gorge. What Xiang Ge Li La lacks in old-world charm, the surrounding countryside makes up for. Most residents are Tibetan; the town's main attraction is the massive Songzanlin monastery, home to 400 Tibetan Buddhist monks.