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Objective: This study explores the structural relationships between sustainable development and competitive advantage in tourism enterprises, along with the mediating role of dynamic capability, especially following the impact of COVID-19. Design/Method/Approach: An online questionnaire survey was conducted to collect 430 valid primary data sets from middle and senior managers in Henan tourism enterprises. Covariance-based structural equation modeling was utilized to test the direct effect, while the bootstrap method was used for testing mediating effects. Findings: The results reveal that sustainable development has a significant impact on the competitive advantage of tourism enterprises from three sustainability dimensions: economic, environmental and social. Meanwhile, dynamic capabilities represented by adaptive, absorptive and innovative capacities play a mediating role between them. Conclusions/Recommendation: The reshaping of the tourism industry by COVID-19 requires practitioners to take dynamic capability seriously in an uncertain environment. The higher demand for sustainability from tourists after the pandemic also suggests that improvements are a viable way for tourism enterprises to restore and cultivate competitive advantage. Originality/ Value: This study focuses on public health emergencies which are scarce in tourism crisis research (Duan et al., 2021). In addition, it is designed to help managers identify elements that can be used as internal drivers (Wang, 2021) showing how firms can incorporate sustainable development into strategic management, as this is still lacking (Zhang et al., 2020) in practice.