The location is very nice in the middle of the Ancient Town, there is lots of tourist and touristic shops. The car or bus cannot enter, so there will be a 10 min walk to the hostel from the city entrance. Theres many restaurants nearby and lots of street food. Also close to the shuttle buses for touristic areas. Since places are a bit far in Dali and theres mainly shuttle buses, public buses and cars to drive around, I suggest staying at least 3 days.
My only complaint is the female bathroom situation specifically at night. The cleaning would be in the morning and by night it would get very messy. But this is also due to the guests behavior, so the solution would be cleaning at night too.
The staff was nice and sometimes would arrange activities in the group chat. I recommend and would come back.
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