Ambassadors Group to close

Ambassadors Group, the Spokane-based education travel company that arranges popular People-to-People tours, is closing and all of its employees will be laid off. No student trips will be canceled this year since the peak travel season is waning, the company said in a news release. Deposits for 2016 trips will be refunded, the release said. CEO Philip Livingston said in an email that the company would have no comment beyond the news release. Ambassadors has operated People-to-People from Spokane since 1967, offering middle-school and high-school students the opportunity to travel the world and stay with local families. The program was conceived in 1956 by President Dwight D. Eisenhower. Ambassadors Group spun off from Ambassadors International in 2002 and handled student travel; the other company handled corporate group travel. At one time brothers Peter and John Ueberroth were major shareholders. But the company struggled when student travel plunged as a result of the 9/11 terrorist attacks and global recession. It reported a 2014 loss of $17.5 million, compared with a loss of $7.1 million the previous year. Big investor groups demanded changes. A showplace headquarters on the West Plains was sold for $9 million in November and the company moved to leased space in the Holley Mason building downtown. “I suspect they were trying to sell (the company) and it couldn’t be done,” said Craig Hart, president and chief investment officer at Hart Capital Management in Spokane, a longtime local stock observer. “It’s too bad,” he said of Ambassadors Group’s demise. “For all the employees… and the heritage of the company.” Ambassadors’ news release said layoffs will begin on July 27. The company will be closed by the end of 2015. At the end of 2014 the company employed 155 people, according to its earnings report. Sixty people were laid off in February. The release said declining revenues and smaller numbers of student travelers drove the decision to close. Executives “explored strategic alternatives and marketing models… (but) determined that an orderly closing of its business is the prudent course on behalf of shareholders,” it said. Hart said the company’s announcement is also a blow to Spokane. Ambassadors Group is one of just 11 major publicly traded companies in the Inland Northwest. Hart Capital Management tracks the performance of the group in a quarterly index that at one time comprised 15 companies. Most recently, AmericanWest bank left the index when it was acquired by a private company in 2010. “We’re going the wrong direction with regard to public companies” in Spokane, Hart said. “It’s disturbing on a larger scale.” Ambassadors Group’s board of directors is deciding how to distribute the company’s cash to shareholders after final payments to travel vendors and others are made. The company reported it had $32 million in cash at the end of the first quarter, after deducting travel deposits and accounts payable. That’s about double the amount of cash available at the same time a year ago. Hart said Ambassadors has a “net liquidation value” of approximately $1.70 a share – about where the company’s shares were trading on the aftermarket late Monday afternoon, after the close of regular trading.