What is the setting of The Lost Horizon by James Hilton?

Shangri-La is an inaccessible community in the mountains of Tibet. There is a fairy tale aspect about the setting. Karakal is the most beautiful mountain Conway has ever seen, a perfectly shaped cone. The moon lights the area in almost a mystical way. The days are warm, but the nights are very cool. The community itself is a series of beautiful and colorful pavilions.