The expansion in commodification through tourism and the transformation of communities and heritages into destination attributes have become the centre of tourism research facing the COVID-19 crisis. Since small family businesses comprise the majority of the tourism industry, theories and practices on surviving the crisis are urgently required. This research attempts to clarify the level of business resilience during the COVID-19 lock down when business can only be conducted at home with very few visitors. It provides insights on family businesses in Yunnan, China, moving ahead with ethnic tourism against the lockdown and shutdown of tourism industry. Data were collected through in-depth interviews. The researchers invited previous research respondents who agreed to continue for online interviews. Eight interviewees were selected by purposive sampling. Although the COVID-19 crisis was unexpected, external shocks need to be taken into account for business planning. Tourism will not necessarily grow massively in the total number of visitors as the destinations have become saturated. The diversification of a tourism business facilitates the resilience of the firm by venturing into other areas of practice, including taking advantage of online platforms in selling local food and herbs, live broadcasting the local flora and fauna, teaching school children in making the traditional pickles, and other business extensions from tourism. Businesses are working together with other stakeholders in the effort of overcoming the COVID-19 crisis. Previous visitors from not only China but also overseas, who have kept in touch with the hosts in Yunnan, are becoming part of the supporting team for the business. However, there appears to be a lack of coordination in the community when businesses are isolated. There is a call for skills in using technology for online business, complementarity in the community, and policy support in the ethnic family businesses. Small family businesses in ethnic Yunnan are actively adapting and progressing despite the odds. They are resilient in times of crisis, with a strong presence of entrepreneurship, diversification of activities, re-organising resources, and digital literacy. The research sheds light on how community-based small family businesses surviving the crisis through resilience, entrepreneurship, and celebrating their ethnic cultures in tourism. Small-scale tourism closely linked with the community, family, and people may provide more promising prospects for tourism.