Ambassadors International, Inc. - Company Profile, Information, Business Description, History, Background Information on Ambassadors International, Inc.

1071 Camelback Street
Newport Beach, California 92660

Company Perspectives:

The company's mission is to deliver outstanding experiences that motivate and inspire customers, partners and employees and innovative event management solutions that cut costs while enhancing performance.

History of Ambassadors International, Inc.

Ambassadors International, Inc., is a leading provider nationwide of strategy, software, and services for meetings and events management and promotional products. The company offers comprehensive hotel reservation and travel services for meetings, conventions, expositions, and trade shows, as well as incentive travel planning and management. Ambassadors has offices in Spokane, Washington, Atlanta, Georgia, Chicago, Illinois, and in Newport Beach, San Diego, and San Francisco, California.

1950s-90s: Promoting Peace through Travel and Education

In 1956, President Dwight D. Eisenhower called a special White House conference of American leaders and asked them to join him in creating the People to People program. Eisenhower hoped to enhance prospects for peace by facilitating contact between nations. He believed that, if ordinary citizens visited each others' homes, attended their schools and places of worship, then the misunderstandings, misperceptions, and resulting suspicions that led to war would disappear. According to his granddaughter Mary Eisenhower, in Ambassadors company literature, Eisenhower held that "the people want peace; indeed, I believe they want peace so badly that the governments will just have to step aside and let them have it."

Eisenhower turned to Mr. Joyce C. Hall, founder of Hallmark Cards, to launch People to People International, Inc. in the private sector, believing that its spirit would be furthered better by private citizens than the government. Hall agreed, and People to People relocated to Kansas City, Missouri. By 1963, People to People had a seven-year history of working toward its mission of personal exchanges and individual, first-hand cultural exchanges among working citizens. That year, Keith Tatham, an active leader in the organization, organized the first delegation of student ambassadors overseas.

Two events occurred in 1967 that shaped the future of People to People. First, the organization became a for-profit business based in Spokane, Washington under Tatham's direction. Second, the Ueberroth brothers, Peter and John, founded International Ambassador Program, Inc., headquartered in California to provide international educational travel programs for students and professionals. People to People plodded along, and by the early 1990s, it was organizing travel for about 6,000 students per year.

1990s: Acquisitions and Partnerships Give Rise to Growth

In 1995, the Ueberroth brothers bought Tatham's business, and the company reincorporated in Delaware under the name Ambassadors International, Inc. Later that year, it went public as a holding company. The Ueberroth brothers drew on their varied experience to expand Ambassadors International. John Ueberroth brought extensive experience in the travel industry to his new business: From 1989 to 1990, he was president of Carlson Travel Group, and from 1990 to 1993, he served as chairman and chief executive officer of Hawaiian Airlines. Peter was a former commissioner of Major League Baseball.

During the second half of the 1990s, Ambassadors International, Inc., opened offices in California, Washington, Illinois, Minnesota; Pennsylvania, Kansas, Massachusetts, Virginia, and Wisconsin and had two operating groups: Ambassadors Education Group and Ambassadors Performance Group. The Education Group, under the direction of Jeff Thomas in Spokane, Washington, offered specialized private-label travel programs for groups such as People to People International, Inc., the Yosemite Institute, and Eddie Bauer. The Performance Group, headed by John Ueberroth, offered an array of performance improvement tools, including travel programs, merchandise award systems, training programs, and marketing communications to businesses.

Beginning in 1996, Ambassadors International engaged in a series of acquisitions. Bitterman and Associates, which developed and managed custom performance improvement programs, and The Helin Organization, a meeting management and incentive travel company, merged into Ambassadors Performance Group that year. Also in 1996, American People to People Ambassador Programs, which along with Ambassadors provided travel services to nonprofit People to People International, Inc., joined the Education Group.

In 1997, the Performance Group acquired Debol & Associates, a marketing incentives company, and in 1998, it acquired Travel Incentives, Inc. and Incentive Associates, Inc.

According to John Ueberroth, president and chief executive officer of the company, in a company-released statement in 1996, the move was part of Ambassador International's expansion efforts into an "important growth area of the travel industry. We are committed to having a major presence in the segment and plan to accomplish this through additional well through-out acquisitions."

The company also engaged in several new partnerships beginning in 1996. It launched an adventure travel program with Eddie Bauer to six destinations: Austria/Switzerland; Australia; India/Nepal; Peru/Galapagos Islands; the Pacific Northwest; and the American Southwest. In 1999, Ambassadors Education Group, Inc., now a wholly owned subsidiary of Ambassadors International, acquired Travel Dynamics International, Inc., a company that specialized in youth travel to overseas sports tours and competitions. That same year, it partnered with Stuart Mill Capital and GE Pension Trust to purchase Sato Travel of Virginia, a leader in providing travel management services to the United States military and government. It sold its share in Sato in 2001.

The Performance Group closed three of its offices in 1999--in Boston, Minneapolis, and one in California--as part of a restructuring effort that included leaving the meetings and incentive merchandising fields and consolidating its conventions services in Georgia. This move led to firing about 30 percent of the Performance Group's staff.

The following year, the company's Education Group acquired a minority interest in Off the Beaten Path of Montana, increasing its access to the baby boomer and adventure travel markets. The year 2000, marked the debut of its travel programs to Cuba when the United States government changed its policy to permit group travel to that country for humanitarian reasons. Ambassadors' programs immediately became one of the nation's chief organizers of sponsored trips to Cuba, sending nearly 50 groups to the island in 2000.

The company as a whole grew steadily throughout the second half of the 1990s. From 1995 to 2001, it enjoyed double-digit growth each year. In 1996, the two operating groups provided services to almost 12,000 students and slightly more than 2,000 professionals. In 1997, student ambassadors totaled a little more than 10,000, with professionals just under 4,000. Programs grew to total 15,500 persons served in 1998 with just under 3,000 professionals. In 1999, the year that the Education Group added its overseas sports programs, that number increased to 17,000 with about 3,000 of these students. The combined total for students and professionals was 25,000 in 2000 and just under 26,000 in 2001, the first of two years that the company was rated one of Forbes best small companies.

Early 2000s: The Education Group Spins Off

By 2001, Ambassadors Education Group was the company's largest revenue producing unit, but the precipitous drop in travel following the September 11th terrorist attacks led to 62 lay-offs in Spokane. Ambassadors International also let go another 30 workers in California and Atlanta who dealt with business-based travel.

By 2002, Ambassadors Education Group employed about 130 people at its offices in Spokane, Washington. In March, it spun off from its parent company, Ambassadors International, Inc., and changed its name to Ambassadors Group, Inc. Its services consisted of student travel, adult travel, sports travel, and conference programs. After the spin-off, Ambassadors International, under the direction of Peter Uberroth and his son, Joe, continued to develop, market, and manage meetings and incentive programs for a nationwide roster of corporate clients that utilized travel, merchandise award programs, and corporate meeting management services. It also provided comprehensive hotel reservation, registration, and travel services for meetings, conventions, expositions, and trade shows.

In fact, Ambassadors Group, Inc. fared better after the September 11, 2001 than it anticipated, an outcome Jeff Thomas, the spin-off's new president and chief executive officer, attributed to two factors in a company press release: "... nearly five decades of developing and operating international travel programs, as well as the program equity that has been generated by traveling thousands of delegates in unique educational adventures. More importantly, our delegates know that there is a mission and purpose behind all of our travel programs. Our programs change lives." Ambassadors Group introduced domestic conference programs in 2002, serving a combined total of 21,000 students and professionals.

Ambassadors Group continued to grow in the year 2003. In 2003, it served 23,000 individuals, and had gross revenues of $108.6 million compared to $97.1 million in sales for 2002. In 2003, John and Peter Ueberroth sold 12 percent of the com- pany's common stock to Invermed Catalyst Fund, L.P. of New York City. In the first quarter of 2004, Ambassadors Group's new domestic programs generated more than 1,000 delegates, a tenfold increase over the 100 delegates that traveled in the first quarter of 2003. The year's totaled served came to more than 31,000, making Ambassadors Group the only travel company to improve its business since the terrorist attack on New York. As it looked to the future, Ambassadors Group anticipated further expanding it domestic conference programs.

Ambassadors International continued to develop as well. After losing $1 million in net income in 2001, it gained $2.8 million in 2002. In 2003, the year that Joseph Ueberroth, Peter's son, replaced John as president and chief executive, it purchased Bluedot, an event and exhibition technology firm and upgraded its Event Portfolio Management software. It also formed reinsurance company Cypress Reinsurance, Ltd. In 2004, it began managing its operations as a single brand, Ambassadors, to enable a single team to market and operate its services to its corporate, association, and tradeshow clientele. According to Joseph Ueberroth in a company release in 2004, "Management is actively repositioning the company to better meet the demands of our industry ... "by realigning and consolidating operations.

Principal Subsidiaries: Cypress Reinsurance, Ltd.

Principal Competitors: WorldTravel BTI; Carlson Wagonlit Travel Inc.


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