The tourism sector is one of the sectors most affected by the pandemic COVID-19. The status of the homestay programme will be maintained for the duration of the Movement Control Order (MCO), as announced by the Prime Minister of Malaysia, from 18 March 2020 to an unspecified date. According to the study, tourism is one of the worst-affected industries in Kundasang, Sabah. This study aims to identify the problems inherent in the Kundasang homestay, whether the problem is internally and externally. Next, the study was to collect the recommendations for improvement to the problems faced by the community. Qualitative research has been used as an inquiry process of understanding based on distinct methodological traditions of inquiry that explore a social or human problem. Twenty-three informants have been interviewed. According to the data collected through an interview with informants, medical essentials ranked the highest factor, and many homestay entrepreneurs hope that the government and private agencies can reduce and solve the challenges they face. After the outbreak’s pandemic, everything changed. Medical essential, labour, utility, maintenance, and miscellaneous are all concerns for homestay entrepreneurs. Several improvement suggestions presented at the end of this study will indirectly assist the tourism management body in developing the tourism sector in Sabah, primarily homestays in Kundasang.