Daocheng is located at an altitude of 3750m. While there may not appear to be much to do in this town those who do decide to stop over and spend a day here will find this town/village much more charming than it initially appears. It offers a good stepping stone for those coming from Yunnan with altitude concerns as the towns either side of it (Xiangcheng and Litang) sit at altitudes of 3200m and 4000m. If you take the time to head out of the town you will find the surrounding countryside and mountainous backdrop quite charming.
There's only one bus from Kangding to Daocheng via Litang. The journey normally takes about 13h. (As of June 2013 the whole stretch of road is under construction, so the journey will probably takes 18h-20h.) There are mini bus departing for Daocheng outside the bus station in Litang. Journel times is normally 4 hours (6-7 hours due to the road construction, which is projected to be completed by 2014.)
The Yadin airport, 50km from Daocheng, is under construction and expected to be completed by August 2013.
You can easily spend a few days just wandering around Daocheng - especially if you go climbing the hill around the city, the arid landscapes are truly stunning. It's a worthy stop on your way, don't treat it just as a sleepover to Kangding/Shangri-La/ However, carry a stick or some stones in your pockets, as wild and freely roaming dogs are a bit of a danger, especially if you leave the villages and stay on your own.
On Echu Street, there is a fast food place called Ousak. They serve a very delicious burger. Echu street meets the main street, Gongga road at the town central square. If coming from the bus station, take a left at the junction of Echu Street and Gongga road and walk about 2 blocks. Ousak is on your right.
There are a large number of budget guesthouses across the road from the bus station. There are also several guesthoues a short distance out from town which several touts crowding around the bus station will happily take you to. However, be aware that when coming in winter, the majority of guesthouses are dead-locked, and even if there is anything open, it will not have running water nor hot water (as the water pipes are frozen during winter). Moreoverm there is no heating as in the whole area. In such situation, it is a must to ask for an electric blanket in the sleeping places (but again, be aware that electricity fails very often). On top of all that, the bus station hotel is definitely not a bargain offer either.
As of Sept '12, there is a large number of Hostels around. 25 RMB for a dorm seems to be the standard price, some will offer a bed for as little as 20 RMB. You will be approached at the bus stop right away, choose your favorite one and enjoy the free lift.
There are 3 official hosteling international hostels in Daocheng. 2 are located on Dexi Street. Exit the bus station, turn left and then left again into Dexi Street. As of August 25th 2013, Dexi street is unpaved. Walk about 100 meters and you will see the first hosteling international hostel on the right called Yading Hostelling International Hostel. Walk a further 100 meters along Dexi Street and you will a second Hostelling international hostel called Yaocheng Hostelling International Hostel. To find the 3rd hosteling international hostel, exit the bus station and turn right. Walk until the end of the road, You will see the hostel on the left. It is called MaMa International Youth Hostel.
All of them are good. Staff speak good English in all of them. MaMa International Youth Hostel offers Yak meat stew in the evenings for 25 yuan depending on demand.
If you arrive by bus you will undoubtedly be accosted by the local minibus drivers offering service to Litang or Xiangcheng. Even if you've made a late afternoon arrival, it is perfectly reasonable to skip Daocheng and take a minibus on to either of these destinations. In this part of Sichuan, minibuses are often the same price as public buses. Service to Litang cost 50¥ at time of writing (26 July 2009).