The Impact of Earthquake on Small Business Performance: Evidence from Small Accommodation Services in Ranau, Sabah

Abstract

The earthquake which occurred on the 5th of June 2015 in Ranau, Sabah was considered to be the most
devastating incident not only to the residents but also to local small businesses in the district. The
aftermath caused tragic deaths of 18 people on Mount Kinabalu, physical damages of buildings, and
lifeline disruptions as well as day-to-day business activities, including the hotels and resthouses.
Numerous studies have been focusing on the damage assessment and risk quantification of natural
disaster aftershock, but there is a lack of studies on the impact of earthquake on small business
performance in terms of physical and emotional aspects before, during and after disaster. Much is still
unknown the actual condition of small accommodation businesses in Ranau due to earthquake, especially
in terms of operation status and recovery strategy to survive in their business. Therefore, this study aims
to explore from the perspectives of manager of accommodation services in Ranau, Sabah about their
business performance and strategy before, during and after the earthquake. A structured face-to-face
interview was conducted with 33 managers of hotels, resorts and homestays in Ranau, which the list were
drawn from the Sabah Tourism Board. The analysis of data revealed that the earthquake caused severe
impact on their business performance in terms of operation, physical and emotional aspects. In addition,
internal recovery strategies were more preferable than the external support for their business recovery. It is hoped that this study may provide valuable insights to small tourism-related business and related
agency to develop effective measures to prepare and support the business before or after natural disaster.