What is Yacht Charter APA and How it Works

What is Yacht Charter APA (Advance Provisioning Allowance)?

The Advance Provisioning Allowance (APA) is a budget additional to the base yacht charter fee, set aside in a separate APA account. The APA covers costs like fuel, food, port fees, and other miscellaneous expenses that occur during the yacht charter.

APA is standard practice in Mediterranean crewed luxury yacht charters. On all yachts operating under MYBA terms, the APA amount is outlined in the charter agreement and is usually set as a percentage of the base charter fee.

APA Management and Reconciliation

You do not want to end your luxury yacht charter vacation with disputes about money, and there are too many cases of charter guests not being able to recover the leftovers of their Advance Provisioning Allowance or being overcharged because they have lost sight of their spending.

Scenario: Managing Unexpected Expenses

Imagine a charter where various unexpected expenses arise, such as higher-than-anticipated fuel consumption due to a change in the travel itinerary or additional port fees from staying longer in a premium location. In such cases, the captain would adjust the APA expenditures to cover these costs. How do you keep track of all of this while enjoying your relaxing vacation?

Why It Is Important to Work with a Broker

A broker plays a key role in this situation by providing oversight and expertise. We ensure that the captain maintains accurate records of all APA expenditures and communicates effectively with the charter client about the financial status throughout the trip. At the end of the charter, the captain presents a detailed APA reconciliation report, which includes receipts and a breakdown of all costs incurred. We have looked at hundreds of these already and know how to properly check them.

Handling Overages and Shortages in APA

• Exceeding APA Estimates: If the expenses exceed the initial APA amount, the broker can facilitate discussions to settle any additional payments required and make sure the additional fee corresponds with the client’s spending.
• APA Underutilization: Conversely, if there are any remaining funds, the broker ensures they are returned to the client via bank transfer. This prevents disputes over charges and maintains a clear, trustworthy relationship between the charter client and the yacht crew.

Guidance on Tipping Practices

Everyone knows the awkward situation of not knowing what to tip, and in yacht charter the rules are rather strict. Brokers are responsible for educating clients about tipping the crew, which can otherwise be mistakenly deducted from the APA without proper client consent. Brokers ensure all fees are according to the charter agreement, transparent, and presented upfront to the client.

The Advantage of an APA Yacht Charter

For clients seeking a customized, high-end experience, the Advance Provisioning Allowance allows for expenditures beyond what an all-inclusive charter would cover. It also gives budget-conscious travelers more control over their spending, so they can manage costs effectively during their charter.

Tax and Tipping Are Cheaper with APA Charters

One key advantage of the APA system is that clients only pay tax and tip on the base price, not the higher all-inclusive cost. For example, tipping 10-15% on the base price is much cheaper than 15-20% on the all-inclusive price, which can mean significant savings, especially for charters in the Caribbean.

Why are the prices of yacht charters shown excluding VAT and APA?

What Does the APA Cover?

• Food & Drinks: Before your charter begins, your broker sends you a preference sheet where you specify food preferences, dietary requirements, and favorite beverages. This helps calculate your APA estimate more accurately.
• Fuel Charges: Fuel costs vary greatly depending on the itinerary and whether you travel long distances or spend more time at anchor. This also includes any fuel used for water toys.
• Harbor Fees & Docking: Harbor and docking fees vary a lot depending on where and when you charter and the size of your yacht. Popular spots in high season are the most expensive. You can keep this cost down by spending some nights at anchor.

NOTE: The Yacht Delivery Fee is NOT included in the APA. There is a separate section in the contract for delivery terms. This fee only applies when the charterer wishes to start from somewhere other than where the yacht is based.

How Is the Advance Provisioning Allowance Calculated?

The Advance Provisioning Allowance (APA) is an estimate of your spending during the charter and depends on several factors. It is usually a percentage of the base yacht charter fee:

• Expect 25-30% for catamarans and sailing yachts.
• Expect 35-40% for motor yachts.

Keep in mind that if you plan a busy itinerary with long distances, the APA can run higher.

Factors Influencing the APA Percentage

• Yacht Size and Type: The biggest influence on APA is fuel consumption: the type of yacht and how far you travel. Large motor yachts with more luxurious amenities and higher fuel consumption have a higher APA than catamarans and sailing yachts. Newer motor yachts generally have more fuel-efficient engines, which can significantly influence your overall charter price.
• Destination & Fuel Prices: In the Mediterranean, fuel prices generally sit around €1.50 per liter (fuel is tax-free in places like Gibraltar and Montenegro). The Caribbean sees a broader range due to its dependence on imported energy, with average diesel prices around €1.27 per liter.
• Guest Preferences: Luxury dining requests, special activities, and docking in popular spots can all raise costs, leading to a higher APA. Preferences for continuous internet access or other communications can also add to the overall costs.