Old Town Hotels vs. Erhai Lake Hotels in Dali: Which Area Is Better?

Dali ranks among the most beautiful places in Yunnan Province. Ringed by soaring mountains on one side and set beside clear blue waters on another, accommodations in Dali could not be more different.

On one side of Dali is the majestic Cangshan Mountains. On the other side of town lies the serene Erhai Lake. When visitors come to Dali, they often wonder where they should stay – Dali Old Town or beside Erhai Lake?

There are pros and cons to staying in either place. Both Dali Old Town and Erhai Lake are buzzing with activity. Both have wonderful places to stay. And both are conveniently located to see what Dali has to offer. But aside from that, your experience in these two areas will be completely different.

Should you stay in Old Town or at Erhai Lake? If you are researching Dali hotels and can’t decide whether to stay in Dali’s Old Town or by Erhai Lake, read our guide to learn about the benefits of each so you can pick the location that better suits your style of travel.

Recommended Hotels for Each Area

Quick Comparison: Old Town vs Erhai Lake

Why Many Travelers Choose Dali Old Town

The Dali Old Town area is where the history of the town takes place. Hundreds of years old, this area contains ancient Bai buildings, city gates, stone walkways, local shops and an endless supply of restaurants.

Old Town is also the most convenient for most travelers visiting Dali for the first time.

Advantages of Staying in Dali Old Town

Pros? Convenience.

Go anywhere in Dali that is touristy and you can get there from Old Town. Spend the morning wandering down the old alleys. Eat Yunnan noodle soup for lunch. Take in a show at night. All without having to arrange transit.

Old Town is full of:

Restaurants. Cafes. Tea houses.

Gift shops. Convenience stores. Night markets.

And if you like to stroll after dinner, Old Town will keep you energized.
Nighttime is when the streets come alive with energy. Street artists, vendors, and local musicians make for great people watching.

Best Hotels in Dali Old Town

Here are some popular hotels:

• Dali Ancient Luchun Hotel
• Dali Landscape Hotel
• Hotel Indigo Dali Erhai (close to entrance of Old Town)
• The Linden Centre
• Dali Old Courtyard Boutique Inn

These hotels are centrally located to attractions in the city but also maintain the cultural atmosphere that Dali is known for.

Drawbacks of Staying in Dali Old Town

If you stay in Old Town life can be convenient. However, it is not all roses.

The biggest downside is that you won’t have the quintessential lake views. This might not bother everyone but it is what travelers typically think of when imagining Dali.

Old Town can also feel congested. During Chinese public holidays and summer vacation it can get very crowded.

Noise can also be a factor if you stay at a hotel on the busiest pedestrian streets.

Why Travelers Love Erhai Lake Hotels

If you have seen those amazing pictures of Dali on Facebook or Instagram then most likely they were taken around Erhai Lake.

Erhai Lake is over 40 kilometers long and is surrounded by mountains. It has been described as looking like an enormous piece of sapphire.

The vibe staying around Erhai Lake is much different from staying in Old Town.

The Biggest Advantage: Incredible Views

Why do travelers book hotels near Erhai Lake? There’s only one answer.

Picturesque views.

Amenities often found at lakefront hotels include:

• Private balconies
• Floor-to-ceiling windows
• Sunrise views
• Beautiful mountain scenery
• Terraces overlooking the water

Sunrise waking up right across the placid Erhai Lake is a Dali hotspot.

There’s nowhere better for photographers and influencers.

A More Relaxed Atmosphere

While Old Town buzzes with tourists and vendors, the lake area is calm. Life moves much slower here.

People spend their days…

• Riding bicycles around the lake
• Visiting lakefront cafes
• Watching the sunset
• Photographing everything
• Lazing around boutique hotels

Travelers seeking relaxation will feel more like they’re staying at a resort than in a city at Erhai Lake.

Best Areas Around Erhai Lake

Erhai Lake is big and there are a handful of villages that have become lodging hot spots.

Shuanglang

As its name implies, Shuanglang may be the most well-known lakeside village.

You will find:

• Luxury boutique accommodations
• Beautiful views of Erhai Lake
• Cool cafes
• Amazing spots for photography

Couples and honeymooners are frequently found here.

Caicun Village

Situated a bit closer to Old Town you’ll find Caicun village. This village is great because it’s sort of a happy medium between being able to explore Dali’s Old Town and enjoying the views of the lake.

Biking from Caicun village to Dali Old Town is super easy which is why we love it for visitors who want it all.

Xizhou

If you’re interested in experiencing more traditional Bai culture and beautiful views then you can’t go wrong with Xizhou.

Xizhou is known for:

• Culture
• Architecture
• Food
• Photography

Many travelers that come to Dali choose to stay in Xizhou over the more touristy areas.

Drawbacks of Staying at Erhai Lake

Hotels around Erhai Lake aren’t for everyone despite the views.

Transportation May Be More Difficult

Hotel compounds around Erhai Lake tend to be further away from popular attractions.

You might need to take:

• Taxi
• Didi
• Rent scooter
• Private driver

just to get to a restaurant or activity outside of your hotel zone.

Limited Food Choices

Popular villages around Erhai Lake have restaurants and cafes but selection is typically lower than Old Town.

If your idea of hotel heaven is dining at a new place every night then Old Town will have exponentially more options.

They Can Be More Expensive

Hotels that boast nice views of the lake typically charge more for rooms.

Popular boutique spots can run double the price of similar hotels in Old Town.

Which Area Is Better for Families?

Families with kids should choose Dali Old Town more often. Transportation/access to restaurants/shops/pharmacies/etc. is convenient. You can walk around for longer periods without having to call for rides.

However if you’re traveling with kids and prefer a slower pace, you may like lakeside resorts around Caicun or Shuanglang more.Simply relax by the lake.

Which Area Is Better For Couples?

Erhai Lake, hands down.

It’s undeniable that the views here are more romantic.

Think sunrises overlooking the lake, private balconies, waterfront dining, luxury boutique hotels.

A majority of Dali’s “Instagram famous” hotels are located right on the lake as well.
So if you’re going on a honeymoon, anniversary, or trip just to enjoy time with your partner, spending more time around Erhai Lake will create better memories.

Which Area Is Better For First-Time Visitors?

If you’re visiting Dali for the first time, chances are Dali Old Town is your safest bet.

There’s a lot you can easily see and do around Old Town:

• Walk the Ancient city walls
• See popular Bai attractions
• Eat local foods at the markets
• Explore traditional buildings
• Visit nearby mountains

It’s also centrally located for day trips in Dali.

Once you gain a better understanding of the region, you can plan subsequent trips around visiting individual villages on Erhai Lake.

The Best Strategy: Split Your Stay

Book Hotels in both places if you are staying for 3 nights or longer.

Split your trip up like many savvy travelers do:

First Part: Dali Old Town

Stay 2 nights checking out:

• The Ancient Town
• Food scene
• Sights
• Nightlife and Shopping

Second Part: Erhai Lake

Transfer to your lakefront hotel and relax. Enjoy:

• Photography
• Biking
• Sunsets
• Lake views

It’s the best of both worlds and ensures you get a true Dali experience.

Final Verdict

So where should you stay in Dali: Old Town hotels or Erhai Lake hotels? It really just depends on what kind of experience you are looking for.

Stay in Dali Old Town if…

You value convenience, culture, food/shopping, and proximity to attractions. Great for first time visitors, families, and travelers who enjoy exploring by foot.

Stay at Erhai Lake if…

You value amazing scenery, romantic sunsets, luxury boutique vibes, and relaxing surroundings. Perfect for couples, photographers, and travelers looking to slow down.

If you have the time, my advice is to stay at a hotel near both Dali Old Town AND Erhai Lake. You’ll experience traditional Dali culture in Old Town, but also see the beautiful natural scenery that makes Erhai Lake one of China’s most recognizable attractions.