"Y'all" has not become standard usage in all parts of the US. It still sounds southern to me (I'm a midwesterner).
I agree that for formal writing, "you all" or "all of you" is the way to go. Or something like "You and your companions." ("You and your companions find yourselves in a tavern.")
I agree that for formal writing, "you all" or "all of you" is the way to go. Or something like "You and your companions." ("You and your companions find yourselves in a tavern.")