The Everest 2016 season is now only six weeks away and it looks to be a critical year in terms of commercial guiding. This is part one of a multi-part series I will run looking at the changing commercial landscape on the world’s highest mountain. And why for some operators 2016 is their last year guiding Everest.

There are many issues with Everest this year as I outlined in my Welcome to Everest 2016 post. Members are wary, the Nepal government is evasive with extending permits and high-end companies are taking their pricing to new levels. And of course all this is against the backdrop of fights, avalanches, earthquakes and deaths.

With some teams running about half of 2015, some operators are struggling to find members and others are fed up with the uncertain government rules. However, most critically, the emerging competition from the Nepali operators have changed the guiding business model leaving some western companies unable to compete.

Is this sour grapes or do the long time western operators have a valid point about the new competition? As I’ve previously noted, it appears that Everest has become a commodity similar to airlines and automobiles where the industry splits into high-end and low-end offerings. I reached out to several long time operators, both Western and Nepali for their views on how the competition is changing in part one of this series.

Long time operator Phil Crampton of Altitude Junkies has operated on both the Tibet and Nepal sides since 2006. He has decided that 2016 will be the last time he guides Everest switching to other mountains in Nepal and around the world. Phil commented on the changing landscape:

The whole Everest market is changing. In previous years it was serious high altitude climbers and alpinists heading to her slopes, it now seems as if anybody with money can go to Everest. I think it’s good that the mountain is now open to all climbers and not just nationally sponsored teams but I think there needs to be some rules set in place for the operators. The local Nepal operators have no western leaders so therefore they do not have to pay the $11,000 fee for each western guide on their expeditions. This means that they also do not have to pay the Icefall fee, fixed rope fee and other associated costs such as the Liaison Officer, rescue insurance, etc. Some of the Sherpas used on these expeditions already live in the Khumbu so they have no airfare to and from Lukla not to mention international airfare that the western guides have. I hear that the local Nepal companies also pay their staff very low wages compared to the established western companies. They hope that their members summit and that they give generous tips and summit bonus to the Sherpas, whereas it’s all included in the asking price on my trips. I think the bottom line these days is that everyone thinks Everest is easy and they look for the cheapest price, not expecting to have to pay extras at the conclusion of the expedition.

Long time Nepali operator, Asian Trekking, sees similar challenges. Dawa Steven Sherpa gave me his perspective on why the Nepali operators are getting so much business:

The simple answer is PRICE. Nepali operators are offering Everest expeditions at very cheap prices which cannot be matched by foreign companies, nor even responsible Nepali companies. And the problem for many climbers is that on paper, everything looks the same except for the price. It is only when they get on the mountain that they realise that “ you get what you pay for” or in this case “ you don’t get what you didn’t pay for!” Though my prices are relatively high, I am not worried about losing those members for whom price is the primary factor in decision making. These members often times end up regretting their decisions and come to me for their second attempt after seeing my operations on the mountain.

And Willie Benegas of Benegas Brothers concurred. They will not be on Everest this year due to the price competition but will guide other mountains around the world. He summed it up:

We have came with sad decision to not run a Everest trip this incoming season, and this bring a lot of sadness to us, We try hard to capture enough members to run a small trip but it was not possible, competitions is fearless!! Regardless we committed to either find another job for our Sherpas or pay them a small severance to help. Nepal needs work our people needs jobs!

and added on the competition:

Well, it’s simple – money! The specific company in this case was charging almost nothing, there was rumor about some of the members being charged as Nepali nationals and thus not requiring $15,000 permits.… Either way, when you are offering an Everest climb for $23,000, people will talk and information gets passed around amongst friends and climbers even before arrival at Base Camp. Hey, I going to climb Everest for $23,000, but the normal cost is $40,000 – $60,000. We are also seeing more and more mainstream media stating that Sherpas are the guides in Nepal and that western guides are not needed and they get paid too much, while the grunt-work is done by the Sherpa. The information missing here is that the largest percentage of deaths happen on (low budget) expeditions with mostly non-western guides. I am not saying all Sherpa Guides are not adequately qualified, far from it, top Sherpa guides are some of the UIAGM guides in the world, and incredible people, but there truly is a misconception when it comes to the lower budget s that all Sherpas are capable of professional guiding, when many simply lack the lengthy training involved to be a successful and safe guide.

And Eric Simonson of International Mountain Guides sees a similar trend with respect to pricing:

… it is pretty clear that lower pricing is a big driver. The Nepal companies conduct their programs at a lower price point for several reasons. They do not hire or pay Western leaders or guides, which is an obvious and big cost saving. What is less obvious to their customers is that these same Nepali operators may also pay their “sherpas” far less than Western companies pay. Many of the “sherpas” that these Nepal companies employ do not come from the Khumbu — many are from poor areas in Nepal like Makalu, Rowaling, etc and are generally willing to work for much less money because for them, it is still huge pay. Many from these other regions earn only $1,000 for working a season on Everest and that is the hidden secret of these Nepali companies. The real question is whether climbers will patronize them despite the poor wages paid to the people responsible for their climb. Is the Everest community willing to pay higher prices to climb in order to close this loophole and force the Nepali operators to pay more equitable wages to all of the Nepal workers? You hear people decry the unfair compensation paid to Sherpas, but few understand how the worst perpetrators are Nepal companies and the foreign outfits that contract with them for cut rate service.

But Eric goes on to postulate that this is normal business:

Price competition in a global economy is a fact of life, but it isn’t coming only from the Nepali outfits. There are plenty of Western operators offering low-end programs. You know the list of usual suspects. A competitive business needs to provide good value at whatever price point they are targeting. If companies try to compete on price alone and ignore their program quality, it becomes a race to zero for everybody. As an industry, we should be concerned with education and fair disclosure about what climbers will get for their money. Climbers have an obligation to do their homework and take full ownership of the ramifications of the various levels of support they are (or aren’t) willing to . It will have a major impact on their safety and their probability of success. People may sometimes patronize a business without looking at the underlying integrity of that business in terms of its employment and environmental practices. Climbers who choose an operator, Nepali or otherwise, simply because it is cheaper need to understand why it is cheaper. Are they cutting corners? Does the low price mean the guides and staff are poorly paid, inexperienced, underinsured and ill equipped? Probably. The media can help everyone understand the difference in quality between the different expedition companies. Then consumers can make an informed choice. Caveat Emptor. As to the cost of Western guides, yes, experienced Western guides are expensive. But not every Everest climber needs or wants to hire one. For those who do, a Western guide can give them a big advantage and this is great for climbers who see the value and are willing to pay the cost. I have absolutely no idea why any Everest operator would use this as an excuse or reason for leaving the business. Maybe they just aren’t able to make the and effectively communicate the value. Everest climbing involves purely discretionary spending, but it is expensive adventure travel with a very strong infusion of pain and suffering. There is a reason not everyone does it, and it is hard work to find people interested in ing into it.

I took a long detailed look at How Much Does it Cost to Climb Mount Everest in my annual review of prices and concluded:

A climb with one or more western guides from the south side will cost at least $60,000. If you want to go with one of the low cost Nepali companies with no frills and perhaps some dangerous shortcuts, it will cost about $30,000 from either side.

With all this as background, in the next installment of Everest: A Changing Mountain, I will look at how guides select their member and if there are in fact too many inexperienced climbers attempting the world’s highest peak today.

Climb On!

Alan

Memories are Everything

Read part 1, part 2 and part 3 of this series.

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