We are thinking of a school trip and basing it in Shaxi. About 35 people in total.
We are wondering about accommodation. How readily available is it? And does anyone have any hotel recommendations or otherwise?

How old are the students?

16-18

I was planning to stay at the Shaxi Old Theatre Inn but it might be pricy.

www.shaxichina.com/stay/shaxi-old-theatre-inn.htm

I also looked this place as a 2nd choice:

www.horsepen46.com/#

Enquire about Shaxi Cultural Center and Guest House - not big enough for 35, but they can put overflow across the lane in another place. Was set up some 8 or more years ago to handle academic groups. Beautiful old courtyard house maybe 150 meters away from the touristified center of Xideng, the village at the center of the Shaxi area. Definitely reserve in advance, if you just show up they will not be prepared to handle such a large group, even if they have the space.
Owner of the place is an academic with about 20 years of experience of student field studies etc. in Yunnan - lives in Kunming, Chinese with excellent English and much experience of college-age American (mostly) students on semester-long programs in Yunnan. There is, or anyway was, an upstairs meeting room (maybe a little small for 35) with some degree of academic library.
Having said this, I haven't been there in 5 years.