Taunggyi is the capital of Shan State in Eastern Myanmar.
Taunggyi is best known for the annual Fire Balloon festival held for one week near the beginning of November each year. For most of every day, hot air paper balloons several metres in length in the shape of various animals are launched and sent floating over the town (if they don't spontaneously combust on take-off, a relatively common occurrence). In the evening the carnival really gets going with the launching of more traditionally shaped balloons carrying cargoes of sweets and fireworks. Definitely one of Myanmar's must-see events, but be warned that hotel prices increase by about 50% during the festival. It's popular with locals, but hardly any foreigners attend.
The market in Taunggyi is worth seeing. Shan noodles and Burmese sweet tea can be purchased at low costs, and CDs and VCDs are cheap and abundant. Another attraction of the market is the abundance of Pa-O (distinguished by interesting headscarves) women selling fresh produce and inexpensive tea from the Shan hills.
As of October 2014, travelers were still NOT allowed to take the public bus from Taunggyi to Kengtung. The Ministry of Hotels & Tourism branch in Taunggyi, director Mr. U Yan Aung (Tel. 09-428315235), is willing to arrange a guide at $80 per day, and a rental vehicle for $1200 (one thousand two hundred dollars) for the journey from Taunggyi to Kengtung.