UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                       ----------------------------------

                                   FORM 10-QSB
     (Mark One)

     [X]  QUARTERLY report pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934

          For the quarterly period ended September 30, 1996

                                       OR

     [ ]  TRANSITION report pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934

          For the transition period from          to
                                         --------    --------
                         Commission file number 0-26420
                                                -------

                       AMBASSADORS INTERNATIONAL, INC.
                       -------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                              91-1688605
     -------------------------------              ------------------
     (State or other jurisdiction of               (I.R.S. Employer
     incorporation of organization)               Identification No.)

     Dwight D. Eisenhower Building
        110 South Ferrall Street
           Spokane, Washington                          99202
     -------------------------------              -----------------
          (Address of principal                       (Zip code)
            executive offices)

     Registrant's telephone number, including area code: (509) 534-6200

     Indicate by check mark whether the registrant (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities Exchange
     Act of 1934 during the preceding 12 months (or for such shorter period
     that the registrant was required to file such reports), and (2) has
     been subject to such filing requirements for the past 90 days.  
     Yes   X     No
         -----      -----

     Indicate number of shares outstanding of each of the issuer's classes
     of common stock, as of the latest practical date:

           Common shares outstanding as of November 12, 1996: 6,615,030

     This report, including all exhibits and attachments, contains ____
     pages.
     <PAGE>
     AMBASSADORS INTERNATIONAL, INC.


     FORM 10-QSB QUARTERLY REPORT

     Table of Contents





     PART I   FINANCIAL INFORMATION

     Item 1.  Consolidated Financial Statements (unaudited)

                Consolidated Balance Sheets at September 30, 1996 and
                  December 31, 1995
                Consolidated Statements of Income for the Nine
                  and Three Months Ended September 30, 1996 and 1995
                Consolidated Statements of Cash Flows for the Nine
                  Months Ended September 30, 1996 and 1995
                Notes to Consolidated Financial Statements

     Item 2.  Management's Discussion and Analysis or Plan of 
              Operation


     PART II  OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K


     SIGNATURES
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Balance Sheets (Unaudited)
     September 30, 1996 and December 31, 1995



                                                September 30,  December 31,
                                                    1996           1995
                                                -------------  ------------
                   ASSETS

     Current assets:
       Cash and cash equivalents                 $18,687,263   $12,974,252
       Restricted cash equivalents                    55,000        45,000
       Investments                                                 275,488
       Accounts receivable (including 
         $14,869 and $33,218 from officers 
         and employees)                              167,730       679,600
       Notes receivable, due within one 
         year                                          1,904         2,334
       Prepaid program costs and expenses          2,200,378       425,530
       Deferred income taxes                                       454,666
                                                 -----------   -----------
           Total current assets                   21,112,275    14,856,870

     Property, plant and equipment, net            1,350,185     1,122,494
     Investment in joint venture                     262,500
     Notes receivable, due after one year             35,100        36,447
     Goodwill and covenant not to compete, 
       net                                         1,000,251
     Other assets                                     20,996
                                                 -----------   -----------
           Total assets                          $23,781,307   $16,015,811
                                                 ===========   ===========


     The accompanying notes are an integral part of the consolidated
       financial statements.
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Balance Sheets (Unaudited), Continued
     September 30, 1996 and December 31, 1995



                                                September 30,  December 31,
                                                    1996           1995
                                                -------------  ------------
               LIABILITIES AND
             STOCKHOLDERS' EQUITY

     Current liabilities:
       Accounts payable and accrued 
         expenses                                $ 2,443,446   $ 1,287,559
       Participants' deposits                      3,907,786     3,462,350
       Income taxes payable                          754,480
       Long-term debt, due within one year             9,893        11,138
                                                 -----------   -----------
           Total current liabilities               7,115,605     4,761,047

     Deferred income taxes                           113,958       113,958
     Long-term debt, due after one year                              5,760
                                                 -----------   -----------
           Total liabilities                       7,229,563     4,880,765
                                                 -----------   -----------

     Stockholders' equity:
       Preferred stock, $.01 par value; 
         2,000,000 shares authorized; 
         none issued and outstanding
       Common stock, $.01 par value; 
         authorized, 20,000,000 shares;
         issued and outstanding, 6,615,030 
         and 6,535,030 shares                         66,150        65,350
       Additional paid-in capital                 12,501,668    11,926,468
       Retained earnings (accumulated
         deficit)                                  3,983,926      (856,772)
                                                 -----------   -----------
           Total stockholders' equity             16,551,744    11,135,046
                                                 -----------   -----------
           Total liabilities and stock-
             holders' equity                     $23,781,307   $16,015,811
                                                 ===========   ===========

     The accompanying notes are an integral part of the consolidated
       financial statements.
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Statements of Income (Unaudited)
     for the nine months and three months ended September 30, 1996 and 1995

     <TABLE>
     <CAPTION>
                                                     Nine Months Ended         Three Months Ended
                                                       September 30,             September 30,
                                                  ------------------------  ------------------------
                                                     1996         1995         1996         1995
                                                  -----------  -----------  -----------  -----------
     <S>                                          <C>          <C>          <C>          <C>
     Revenue                                      $16,429,374  $13,784,914  $ 5,879,697  $ 5,448,621
                                                  -----------  -----------  -----------  -----------
     Operating expenses:
       Selling and tour promotion                   6,056,529    5,402,466    2,519,886    2,818,152
       General and administrative                   4,116,497    3,358,920    1,300,271    1,277,591
                                                  -----------  -----------  -----------  -----------
                                                    10,173,026   8,761,386    3,820,157    4,095,743
                                                  -----------  -----------  -----------  -----------
     Operating income                               6,256,348    5,023,528    2,059,540    1,352,878
                                                  -----------  -----------  -----------  -----------
     Other income (expense):
       Interest expense                                (1,037)      (1,764)        (257)        (538)
       Interest and dividend income                   832,305      573,126      258,013      209,683
       Realized and unrealized gain on
         investments and other                        290,253      313,758       37,001      305,962
       Other, net                                     (43,026)       5,695       11,017        1,537
                                                  -----------  -----------  -----------  -----------
                                                    1,078,495      890,815      305,774      516,644
                                                  -----------  -----------  -----------  -----------
     Income before income taxes                     7,334,843    5,914,343    2,365,314    1,869,522
     Provision for income taxes                     2,494,145       25,000      804,364       25,000
                                                  -----------  -----------  -----------  -----------
     Net income                                   $ 4,840,698  $ 5,889,343  $ 1,560,950  $ 1,844,522
                                                  ===========  ===========  ===========  ===========
     Net income per share                         $      0.73  $      1.11  $      0.24  $      0.31
                                                  ===========  ===========  ===========  ===========
     Weighted average common shares outstanding     6,606,563    5,317,312    6,615,030    5,947,461
                                                  ===========  ===========  ===========  ===========
     </TABLE>
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Statements of Operations, Continued (Unaudited)
     for the nine months and three months ended September 30, 1996 and 1995

     <TABLE>
     <CAPTION>

                                                     Nine Months Ended         Three Months Ended
                                                       September 30,             September 30,
                                                  ------------------------  ------------------------
                                                     1996         1995         1996         1995
                                                  -----------  -----------  -----------  -----------
     <S>                                          <C>          <C>          <C>          <C>
     Pro forma information:  
       Income before income taxes                 $ 7,334,844  $ 5,914,343  $ 2,365,314  $ 1,869,522  
       Income tax provision                         2,494,146    2,011,112      804,364      635,840
                                                  -----------  -----------  -----------  -----------
       Net income                                 $ 4,840,698  $ 3,903,231  $ 1,560,950  $ 1,233,682
                                                  ===========  ===========  ===========  ===========
       Net income per share                       $      0.73  $      0.73  $      0.24  $      0.21
                                                  ===========  ===========  ===========  ===========
       Shares used in pro forma calculation         6,606,563    5,317,312    6,615,030    5,947,461
                                                  ===========  ===========  ===========  ===========
     </TABLE>

     The accompanying notes are an integral part of the consolidated 
       financial statements.
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Statements of Cash Flows (Unaudited)
     for the nine months ended September 30, 1996 and 1995


                                                    1996         1995
                                                 -----------  -----------
     Cash flows from operating activities:
       Net income                                $ 4,840,698  $ 5,889,343
       Adjustments to reconcile net income
         to net cash provided by operating 
         activities:
           Depreciation and amortization             291,074      162,026
           Deferred income tax provision             454,666       25,000
           Gain on investments                      (290,253)      (7,746)
           Loss on sale of property, plant
             and equipment                               880
           Change in assets and liabilities,
             net of effects of purchases of
             subsidiaries:
               Restricted cash                       (10,000)
               Accounts receivable                   840,944   (1,140,200)
               Stockholder receivable                       
               Prepaid program costs and 
                 expenses                         (1,323,018)  (4,759,612)
               Proceeds from maturity of for-
                 ward foreign exchange contracts     559,812
               Purchase of investment                          (1,000,000)
               Proceeds from sale of investment                 1,076,408
               Accounts payable and accrued 
                 expenses                            532,901    2,238,461
               Participants' deposits               (546,151)   2,767,668
               Income taxes payable                  754,480
               Accrued compensation                            (2,403,600)
                                                 -----------  -----------
                   Net cash provided by 
                     operating activities          6,106,033    2,847,748
                                                 -----------  -----------
     Cash flows from investing activities:
       Purchase of property, plant and 
         equipment                                  (249,827)    (264,338)
       Proceeds from sale of property, plant 
         and equipment                                 1,220
       Investment in joint venture                  (262,500)
       Cash received from acquisitions of
         subsidiaries, net of cash paid              147,314


     The accompanying notes are an integral part of the consolidated
       financial statements.
     <PAGE>
     Ambassadors International, Inc.
     Consolidated Statements of Cash Flows (Unaudited), Continued
     for the nine months ended September 30, 1996 and 1995


                                                    1996         1995
                                                 -----------  -----------
     Cash flows from investing activities,
       Continued:
         Maturity of investment                  $     5,000
         Net payments received on notes 
           receivable                                  1,776  $     1,634
         Payments on sale of building                             896,063
         Other                                       (29,000)
                                                 -----------  -----------
                   Net cash provided by (used 
                     in) investing activities       (386,017)     633,359
                                                 -----------  -----------

     Cash flows from financing activities:
       Stockholder distributions                               (5,076,690)
       Proceeds from public offering                           12,054,491
       Redemption and retirement of common 
         stock                                                 (1,820,000)
       Origination of receivables from
         stockholders                                          (2,036,250)
       Notes receivable issued to stockholder                            
       Payments received on stockholder note
         receivable                                             2,018,125
       Payments of long-term debt                     (7,005)      (6,236)
                                                 -----------  -----------
                 Net cash provided by (used in)
                   financing activities               (7,005)   5,133,440
                                                 -----------  -----------
     Net increase in cash and cash 
       equivalents                                 5,713,011    8,614,547
     Cash and cash equivalents, beginning 
       of period                                  12,974,252    6,633,578
                                                 -----------  -----------
     Cash and cash equivalents, end of 
       period                                    $18,687,263  $15,248,125
                                                 ===========  ===========


     The accompanying notes are an integral part of the consolidated 
       financial statements.
     <PAGE>
     AMBASSADORS INTERNATIONAL, INC.
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     1.  BASIS OF PRESENTATION

         The consolidated financial statements included herein have been
         prepared by Ambassadors International, Inc. (the Company), without
         audit, pursuant to the rules and regulations of the Securities and
         Exchange Commission.  Certain information and footnote
         disclosures, normally included in financial statements prepared in
         accordance with generally accepted accounting principles, have
         been condensed or omitted as permitted by such rules and
         regulations.  The Company believes the disclosures included herein
         are adequate; however, these consolidated statements should be
         read in conjunction with the financial statements and the notes
         thereto for the year ended December 31, 1995 previously filed with
         the Securities and Exchange Commission on Form 10-KSB.

         In the opinion of management, these unaudited, consolidated
         financial statements contain all of the adjustments (normal and
         recurring in nature) necessary to present fairly the consolidated
         financial position of the Company at September 30, 1996, the
         consolidated results of operations for the nine- and three-month
         periods ended September 30, 1996 and 1995 and the consolidated
         cash flows for the nine-month periods ended September 30, 1996 and
         1995.  The results of operations for the periods presented may not
         be indicative of those which may be expected for the full year.


     2.  PRINCIPLES OF CONSOLIDATION

         The Company was incorporated in the state of Washington in 1967
         and was reincorporated on August 4, 1995 in the state of Delaware. 
         The consolidated financial statements include the accounts of
         Ambassadors International, Inc., its subsidiary, Ambassador
         Programs, Inc. (API) and in 1996, the Company's or API's
         subsidiaries, The Helin Organization and American People
         Ambassador Programs.  All significant intercompany accounts and
         transactions are eliminated in consolidation.


     3.  INCOME TAXES

         From January 1, 1994 through August 4, 1995, Ambassadors
         International, Inc., was treated for federal income tax purposes
         as an S corporation under Subchapter S of the Internal Revenue
         Code. As a result, the Company's earnings for such period were
         taxed at the stockholder level.  Beginning August 5, 1995, the
         Company's earnings have been taxed as a C corporation and
         provisions for income taxes have been provided in the Company's
         consolidated financial statements.
     <PAGE>
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


     3.  INCOME TAXES, CONTINUED

         For the three and nine months ended September 30, 1996, the
         Company recorded the following income tax provisions:

                                  Nine Months Ended   Three Months Ended
                                  September 30, 1996  September 30, 1996
                                  ------------------  ------------------
           Current                    $2,039,479          $  804,364
           Deferred                      454,666
                                      ----------          ----------
                                      $2,494,145          $  804,364
                                      ==========          ==========

         The Company's income tax provision is provided at the estimated
         annual effective income tax rate.


     4.  PRO FORMA STATEMENT OF INCOME INFORMATION

         The pro forma statements of income for the three- and nine-month
         periods ended September 30, 1995 present the pro forma effects on
         the historical information to record income taxes.  An income tax
         provision has been recorded to reflect income taxes at statutory
         rates applied to the pro forma income before income taxes as if
         the Company were taxed as a C corporation rather than an S
         corporation.


     5.  1996 ACQUISITIONS

         On January 29, 1996, the Company acquired all of the outstanding
         common stock of The Helin Organization, which is located in
         Newport Beach, California.  The Helin Organization is a meeting
         management and incentive travel company and has become a separate
         division of the Company.

         On February 7, 1996, API acquired the assets of American People
         Ambassador Programs (APAP).  APAP has offices in Winnebago,
         Illinois and Birmingham, Alabama and provides adult travel
         programs that are very similar to the Company's adult programs. 
         The former president of APAP has entered into an employment
         agreement with API and will continue to market the APAP programs.

         These companies were acquired for $200,000 cash, shares of the
         Company's common stock and contingent consideration.  The
         contingent consideration is dependent upon the success of one of
         the subsidiary's travel programs.  These acquisitions have been
         accounted for using the purchase method of accounting.  The
         Company recorded goodwill of approximately $973,000 in connection
         with these acquisitions.  The goodwill is being amortized over 10
         years on a straight-line basis.  A portion of the contingent
         consideration will be accounted for as goodwill and will be
         amortized accordingly when, and if, the contingency is removed and
         <PAGE>
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


     5.  1996 ACQUISITIONS, CONTINUED

         additional consideration is paid.  Another portion of the
         contingent consideration will be accounted for as compensation
         expense when, and if, paid. The results of operations of the
         acquired companies is included in the 1996 operations from the
         respective dates of their acquisitions.  Assuming the companies
         had been acquired on January 1, 1995, revenue of the Company 
         would have been approximately $18.5 million for the year ended 
         December 31, 1995.  Net income and pro forma earnings per share
         would not have been materially different than as previously
         reported by the Company for 1995.

         In October 1996, the Company announced its intention to acquire
         the outstanding common stock of Bitterman & Associates, Inc. for
         cash and shares of the Company's common stock.  As of November 12,
         1996, the acquisition has not been consummated but is expected to
         be completed prior to December 31, 1996.  However, there can be no
         assurance that the acquisition will be consummated.  The Company
         is also pursuing additional acquisitions; however, no definitive
         agreements have been reached.


     6.  INVESTMENT IN JOINT VENTURE

         During the second quarter of 1996, the Company acquired a 15%
         interest in a joint venture for $262,500.  The joint venture's
         purpose is the acquisition of preferred stock (which represents
         18.4% of the total outstanding stock) of a private company.  The
         Company's president is the joint venture's representative on the
         board of directors of the private company.
     <PAGE>
     Item 2. Management's Discussion and Analysis or Plan of Operation

     This Quarterly Report on Form 10-QSB contains forward-looking
     statements.  A forward-looking statement may contain words such as
     "will continue to be," "will be," "continue to," "expect to,"
     "anticipates that," "to be" or "can impact." Management cautions that
     forward-looking statements are subject to risks and uncertainties that
     could cause the Company's actual results to differ materially from
     those projected in forward-looking statements.

     COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THE THREE
     MONTHS ENDED SEPTEMBER 30, 1995

     During the first quarter of 1996, the Company and its subsidiary
     acquired two other companies which operate travel programs.  Although
     these companies contributed to the gross program receipts and revenue
     of the consolidated group in the first nine months of 1996, due to the
     timing of the acquisitions and future changes which management plans
     to make to the operations of these companies, management believes that
     the future contribution and profitability of these two acquisitions
     will improve.

     GROSS PROGRAM RECEIPTS AND REVENUES
     -----------------------------------
     Gross program receipts increased from $15.0 million in the third
     quarter of 1995 to $19.8 million in the third quarter of 1996.  This
     increase can be principally attributed to a 10% increase in the number
     of API program participants and the acquisitions of the Helin
     Organization (Helin) and American People Ambassador Programs (APAP) in
     the first quarter of 1996.  The number of program participants
     traveling during the third quarter of 1996 was 4,574 compared to 3,806
     in the comparable 1995 period.  This increase in program participants
     was the primary reason for the increase in gross program receipts for
     the third quarter of 1996 in comparison to the third quarter of 1995.

     Gross program receipts increased 31% to $19.6 million for the third
     quarter of 1996 from $15.0 million in the third quarter of 1995.
     Revenues increased to $5.9 million from $5.5 million as a result of a
     larger product base with the addition of two acquisitions earlier in
     1996, and revenue gains did not keep pace with gross program receipts
     because of the acquired businesses. The Helin Organization has products
     and services that trend toward higher volume but lower margins.

     SELLING AND TOUR PROMOTION EXPENSES
     -----------------------------------
     The Company's policy is to expense all selling and tour promotion
     costs as they are incurred.

     For the third quarter of 1996, selling and tour promotion expenses
     were $2.5 million compared to $2.8 million in the prior year.  This
     decrease is principally the result of cost-cutting measures and more
     judicious use of mailings based upon demographic and historical
     analysis.
     <PAGE>
     GENERAL AND ADMINISTRATIVE EXPENSES
     -----------------------------------
     Even with the addition of the Helin Organization and APAP, general and
     administrative expenses remained relatively stable at $1.3 million in
     1995 and 1996.

     OTHER INCOME/EXPENSE
     --------------------
     Other income primarily consists of foreign currency gains or losses
     and interest income.  Other income decreased to $306,000 in the third
     quarter of 1996 from the third quarter of 1995 of $517,000.  All of
     this decrease can be attributed to decreased realized and unrealized
     gains on foreign exchange contracts.

     INCOME TAXES
     ------------
     Due to the change in status from an S Corporation to a C Corporation
     in August 1995, the Company has recorded an income tax provision of
     approximately $804,000 for the quarter ended September 30, 1996 in
     comparison to $25,000 income tax provision for the quarter ended
     September 30, 1995.  The 1996 income tax provision is based on the
     estimated annual effective tax rate.  The pro forma income tax
     provision for the third quarter of 1995 assumes the Company was a C
     Corporation during the quarter and reflects the federal statutory tax
     rate of 34% is applied to income before income taxes.

     NET INCOME AND EARNINGS PER SHARE
     ---------------------------------
     The above factors resulted in the Company reporting net income of $1.6
     million or $0.24 per share for the third quarter of 1996 compared to
     pro forma net income of $1.2 million or $0.21 per share in the
     comparable 1995 quarter.

     SEASONALITY
     -----------
     Due to the seasonality of the core business of Ambassadors
     International, Inc., the first and fourth quarters of the fiscal year
     have significantly fewer programs traveling than the second and third
     quarters of the year.  Thus, the net income reported in any quarter
     may not be indicative of the annual income.

     COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO THE NINE MONTHS
     ENDED SEPTEMBER 30, 1995

     GROSS PROGRAM RECEIPTS AND REVENUES
     -----------------------------------
     Gross program receipts increased from $38.8 million in 1995 to $49.9
     million in 1996.  This increase can be principally attributed to the
     increase in the number of program participants and the acquisition of
     Helin and APAP in the first quarter of 1996.  The increase in gross
     program receipts resulted in a 19% increase in revenues from 1995 to
     1996.
     <PAGE>
     The number of program participants traveling during the nine months
     increased from 9,949 in 1995 to 13,094 in 1996.  This 32% increase in
     program participants was the principal cause of the 19% increase in
     revenues for the first nine months of 1996 in comparison to the same
     period in 1995.
       
     SELLING AND TOUR PROMOTION EXPENSES
     -----------------------------------
     Selling and tour promotion expenses for the first nine months of 1996
     increased from 1995 by $654,000.  This increase can be primarily
     attributed to additional expenses incurred by Helin and APAP.

     GENERAL AND ADMINISTRATIVE EXPENSES
     -----------------------------------
     General and administrative expenses increased from $3.4 million for
     the first nine months of 1995 to $4.1 million for the first nine
     months of 1996.  This increase is principally due to costs associated
     with the aforementioned companies and increased professional fees
     related to being a publicly-held company versus a privately-held
     company.  

     OTHER INCOME/EXPENSE
     --------------------
     Other income primarily includes foreign currency gains or losses and
     interest income.  Other income increased approximately $188,000 for
     the first nine months of 1996 in comparison to the same period in
     1995.  The majority of this increase can be attributed to the interest
     income earned on cash received from the initial public offering. 

     INCOME TAXES
     ------------
     Due to the change in status from an S Corporation to a C Corporation
     in 1995, the Company has recorded an income tax provision of
     approximately $2.5 million for the nine months ended September 30,
     1996 in comparison to $25,000 income tax provision for the nine months
     ended September 30, 1995.  The 1996 income tax liability is based on
     the estimated annual effective tax rate.  Pro forma income tax expense
     of $2.0 million for 1995 assumes the Company was a C Corporation
     during the quarter and reflects the federal statutory tax rate of 34%
     applied to income before income taxes.

     NET INCOME AND EARNINGS PER SHARE
     ---------------------------------
     The above factors resulted in the Company reporting net income of $4.8
     million in comparison to $3.9 million in the same period of the prior
     year.  This corresponds to $0.73 per share in both periods due to an
     increase in the number of shares outstanding in 1996.
     <PAGE>
     LIQUIDITY AND CAPITAL RESOURCES
     -------------------------------
     The Company s business is not capital intensive.  However, the Company
     does retain funds for operating purposes in order to conduct sales and
     marketing efforts for future programs and to facilitate acquisitions
     of other companies.

     Net cash provided by operations for the nine months ended 
     September 30, 1996 and 1995, respectively, was approximately $6.1
     million and $2.8 million, respectively.  The increase in cash flows
     from 1995 to 1996 can be attributed to the timing of cash receipts
     from participants and the elimination of approximately $2.4 million of
     incentive compensation which was paid in 1995 and did not recur in
     1996.

     During the nine months ended September 30, 1996, the Company invested
     $262,500 in a joint venture (see Note 6 to the consolidated financial
     statements).

     Capital expenditures, of approximately $250,000 were funded from
     operations.  The Company does not have any material capital
     expenditure commitments for the ensuing year.  However, the Company is
     continuing to pursue further acquisitions of related travel businesses
     that will require some of its available cash and cash equivalents.  

     The Company had no significant long- or short-term debt as of 
     September 30, 1996.  The Company has a credit facility available with
     Seafirst Bank for $12.0 million (U.S.) for foreign currency purchases
     and forward contracts.

     At September 30, 1996, the Company had approximately $18.7 million of
     cash and cash equivalents.  Management believes cash flows from
     operations will be sufficient to fund the Company s anticipated
     operating needs, capital expenditures and acquisitions for the ensuing
     year.

     FOREIGN CURRENCY; HEDGING POLICY
     ---------------------------------
     The substantial majority of the Company s programs take place outside
     of the United States and most foreign suppliers require payment in
     their own currency rather than U.S. dollars.  Accordingly, the Company
     is exposed to foreign currency risks in certain countries as foreign
     currency exchange rates between those currencies and the U.S. dollar
     fluctuate.  In 1993, the Company initiated a program to hedge against
     these foreign currency risks in the currencies of countries in which
     the largest amount of program pass-through expenses are denominated in
     foreign currency.  To hedge against foreign currency risks, the
     Company has used forward contracts which allow the Company to acquire
     the foreign currency at a fixed price for a specified period of time. 
     The Company also uses foreign currency call options which provide the
     Company with the option to acquire certain foreign currencies at a
     fixed exchange rate and time period.  Concurrent with the purchase of
     a foreign currency call option, the Company sells a foreign currency 
     <PAGE>
     put option to minimize the net premium paid for the call option.  The
     strike prices on these options generally straddle the exchange rate at
     the time the options are purchased and sold.  Additionally, the
     Company purchases futures contracts to similarly hedge its foreign 
     currency risk.  The Company is exposed to credit risk under the
     forward contracts and options to the extent that the counterparty is
     unable to perform under the agreement.  The Company anticipates
     hedging the majority of its foreign currency risk in future periods. 
     There can be no assurance that the Company s hedging strategies will
     be successful in mitigating the impact of foreign currency
     fluctuations.  As of September 30, 1996, the Company did not have any
     foreign currency or call options outstanding.

     NEW ACCOUNTING PRONOUNCEMENT
     ----------------------------
     In October 1995, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 123 (SFAS No. 123),
     "Accounting for Stock-Based Compensation."  The Statement establishes
     financial accounting and reporting standards for stock-based employee
     compensation plans.  The Statement encourages all entities to adopt a
     fair value based method of accounting, but allows an entity to
     continue to measure compensation cost for those plans using the
     intrinsic value method of accounting prescribed by APB Opinion No. 25,
     "Accounting for Stock Issued to Employees."  The Company adopted the
     disclosure requirements only of SFAS No. 123 on January 1, 1996.
     <PAGE>
     PART II.  OTHER INFORMATION


     Items 1, 2, 3, 4 and 5 are not presented as they are not applicable.

     Item 6.  Exhibits and Reports on Form 8-K.

              Exhibits: 27 - Financial Data Schedule

              Reports on Form 8-K:

              NONE
     <PAGE>
     SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
     the registrant has duly caused this report to be signed on its behalf
     by the undersigned thereunto duly authorized.


     AMBASSADORS INTERNATIONAL, INC.


     Date: November 14, 1996    By: /s/Jeffrey D. Thomas
           -----------------        ----------------------------------
                                    Jeffrey D. Thomas, 
                                    Chief Financial Officer
<PAGE>