We both really loved Shangri-la. It feels much more Tibetan than Chinese, with big wooden buildings and colourful prayer flags everywhere. We stayed at Tavern 47, a guesthouse run by a Korean man and his Naxi wife. It was really comfortable, despite having no electricity or running water during that day on two of the days we were there.
We spent one morning visiting the large monastery just outside the town and also enjoyed the smaller temples in the town. In the evening, the town centre was filled with people dancing in circles to lovely Tibetan music. We were very sad to leave.