When James Hilton's novel Lost Horizon hit bookstores in 1933, hordes of adventurers went searching the Himalayas for the mythical paradise he imagined. Sixty-eight years later, the supposed setting for Hilton's book was officially renamed Shangri-La to entice a new generation of tourists. Today the northern Yunnanese county (formerly called Zhongdian) hosts a thriving mixture of ethnicities; Tibetan culture, most agree, is more vibrant and authentic here than in Communist-occupied Tibet. A creative set has fled the urban grind of Beijing and Shanghai and is transforming traditional mud-brick houses into galleries, inns, and cafés. Now you can take yak butter tea next to Chinese artists and saffron-robed monks at the Treehouse (86-887/823-1296), in the main town of Zhongdian, and then use the café's Wi-Fi to check your e-mail. Or grab a martini nearby at the bohemian bar Raven (86-887/828-9239). Cropping up along flower-fringed paths to hilltop monasteries is also a new class of hotels. Book a room at the year-old Banyan Tree Ringha (www.banyantree.com), a 32-room converted-farmhouse hotel and spa; the rustic Gyalthang Dzong Hotel (www.coloursofangsana.com), where all 47 rooms face an interior courtyard; or the Songtsam Hotel (www.songtsam.com), which showcases the work of local coppersmiths and rug makers. Then watch the mist envelop the legendary craggy peaks.
Gyalthang Dzong Hotel
Banyan Tree Ringha
Guest quarters are decorated with vivid thangkas and woolen carpets in the rich rust and maroon hues that are a local trademark, and each has an open hearth for cold winter nights as its centerpiece. Private balconies offer breathtaking views of the Ringha River and distant snowcapped peaks.