Although many studies have explored business resilience during crisis, most subjects are large companies with abundant resources. Hardly any research has explored how small and medium companies with limited resources overcome crisis. This study aims to fill this void by investigating the process of resilience and transformation of small firms during and post-COVID-19. The multiple case study method was applied under the framework of entrepreneur mindset, adaptive capacity, and social capital. Small hostels in Thailand and their reaction towards COVID-19 are explored as they were hugely impacted by the pandemic. Four hostels were selected as representative cases of business resilience during September 2020–2021. The results show that these hostels managed to utilize bonding social capital to reshape the business in the short term. In response to the prolonging of the COVID-19 pandemic, bridging social capital was employed to develop a new business model and business sustainability. The entrepreneur mindset is essential for succeeding in the proposed business and helping the owner to be aware of and engage with specific social capital. The entrepreneur mindset also helped to create trust between owner and staff, which enhances adaptive capacity in the firm for resilience and transformation of the business. The findings can guide SMEs to become aware of having a good entrepreneur mindset as well as to utilize their social capital and create business innovation and sustainability to survive the crisis. This study aims to explore the mechanism and factors that successfully drive specific small companies to transform themselves despite their limited resources. The findings will benefit SMEs by providing recommendations for business resilience and post-COVID-19 recovery. The tourism industry in Thailand is examined because the industry vastly contributes to Thailand economy and was largely impacted by COVID-19. The Thai tourism sector created 36 million jobs between 2014 and 2019. The tourism sector contributes to 15 percent of Thailand’s GDP. Since March 2020, the COVID-19 pandemic and its related restrictions have almost ceased all international tourist arrivals. Passengers on international flights to Thailand dropped by 95 percent in September 2021, compared to the previous year. The Thai Hotels Association conducted a survey with 128 responses in March 2021. The occupancy rate decreased from 30% to 5%, and 80% of the hotels temporarily shut down. The object of this study is a small hostel in Thailand. This is because of two reasons. Firstly, the business size of most hostels is small and medium. The number of rooms is between 4 and 50 rooms and the majority are run by one business owner. Secondly, hostels were highly impacted by both COVID-19 and adaptation strategies of hotels. Losing revenue from foreign tourists, most hotels lowered the price to a level that was close to the hostel price to attract local people. It could be said that hostels in Thailand were small companies with a limited budget that struggled considerably because of the pandemic and rising number of competitors. Thus, the surviving hostels and their resilience mechanism are worth exploring.
