Nepal's travel-traders seem to know how to run every sector of tourism into the ground.
The two biggest problems of Nepali tourism are over-supply and under-cutting. The market is saturated with 'vendors', and each tries to under-price the other —among lodges, hotels, airlines, travel agencies, trekking agencies, rafting agencies, wildlife safaris, and even porters and riksa-pullers. A five-star hotel in downtown Kathmandu will provide bed and breakfast for as little as 20 dollars, and nowhere in the world be, in the Thamel tourist quarter can you have clean in sheets and attached-bath for as low as two dollars a night.
In whichever sector, Nepal's tourism has always started the high end, but then the 'service provider', proliferate and the asking price pummels. The country becomes a tourist heaven and tourism hell — enough to begin asking whether the industry is here to serve Nepal or vice versa.
The oversupply of 'capacity' itself is not a problem (and it does represent a more 'democratic' sharing of the pie). The issue is a terrible failure to market the country so as to fill all those extra beds. There are by today more than 300 trekking agencies in Nepal, vying for about 100,000 trekkers annually, many of whom actually prefer to walk unorganised. The hotels in Kathmandu are running at 36 percent occupancy — it has been years since the top hotels got top dollars. There was a time when high-end trekking used to go with ease for USD 150 a day, but the average now is about 20-25 dollars. White-water rafting, even till five years ago, was at USD 40 a day, but today the asking price is less than half of that.