APA stands for advanced provisioning allowance and is a key part of the price of a yacht charter. The APA is a sort of deposit or prepaid amount that the yacht owner or chartering company charges a client to cover expected expenses related to a charter. Essentially, the supplies, mooring fees, and other operational costs for the duration of a journey are calculated and charged in advance.
Understanding Advanced Provisioning Allowance (APA) in Yacht Charter
Why do most brokerage companies collect APAs? There are two simple reasons. One is so that the captain of the yacht has money to cover daily expenses to ensure that all your needs can be easily taken care of while on board. The other reason is to handle expenses up front and not have to bother you constantly when costs come up. You wouldn’t want to keep having your experience interrupted by people asking you for money repeatedly. Instead, they can use the APA as a source of funds and let you enjoy yachting in peace.
Components Covered by APA
While the actual yacht rental, crew salaries, taxes, and insurance are all components that are calculated separately, the main components of an APA typically include:
- Fuel and Dockage Fees: Wherever you make port, you’ll need to pay for a berth at a marina where you can hook up to water and electricity. Naturally, you’ll also need to fuel up regularly and both these costs can be drawn from the APA.
- Food and Beverages: The APA typically pays for all consumable provisions on board. For example, food ingredients, water, and alcoholic beverages.
- Other Miscellaneous Expenses: You may need to pay for communications while on board. Or, legal charges, crew gratuities, and other assorted costs from cigars to sunscreen. All of these expenses can be taken from the APA.
How APA is Calculated
An APA is normally calculated as a percentage of the yacht charter price. Between 30% to 40% is quite normal as a standard APA percentage. At the same time, the number of people you plan to have on board, the activities you plan, and your journey’s schedule can all influence the amount of the APA. If you plan to have large soirees on the yacht or sail quite long distances, the broker may choose to assess an APA of 40-50%. Typically, you’ll pay the APA along with your last yacht charter installment so that the yacht can be provisioned and prepared in advance of your journey.
How Advanced Provisioning Allowance is Used During a Yacht Charter
Management of APA Funds
Depending on the size of the yacht’s crew, the APA will normally be managed by the captain or a purser appointed by the captain. This person will have access to the APA funds. Also, will keep clear accounts of all expenses by collecting receipts and recording expenditures. These accounts should be freely available for you to check during or at the end of your voyage.
Common Expenses Paid with APA
The crew will start using the APA even before you leave shore. For instance, to clean and prepare the yacht and buy fuel, food, and drink. Once you set off on your journey, you may need to use satellite phones or internet connections, which will also be billed to the APA. When you make port, there will be marina fees and likely re-provisioning costs for more food, drink, and fuel that will also come out of the APA.
Post-Charter Settlement
At the end of your charter, the captain or purser will finalize their accounts and normally send them to the broker’s accounting department for review. You will then be notified of the final costs and whether there is any of your APA leftover. You may ask to review the accounts yourself for clarification. According to your charter agreement, the unused remainder of the APA will be returned to you. The method and timing of this refund should be stated in your yacht charter agreement. If, however, the expenses exceed the APA, you will be billed to make up the difference.
Benefits and Drawbacks of Advanced Provisioning Allowance
Assessing an APA is beneficial for both you and the broker. It allows you to enjoy your journey without having to worry about constantly handing out money for expenses, large and small. For the broker, there is a lump sum of money to draw from. It means they don’t need to risk paying out of pocket for your expenses. Accounting is normally done clearly and reliably. Also, you’re always free to ask to review the accounts if you have questions or want to monitor expenditures. While it might seem like a financial burden to front-load your yacht charter with a large APA, this usually prevents the APA from running out, so you won’t need to access more funds mid-journey.
FAQs About Advanced Provisioning Allowance in Yacht Charter
- What happens if the APA runs out during the charter?
While you might want to keep the APA low, it can be a real bother if it runs out before the end of your yacht charter. If this happens, you’ll be contacted by the captain or the yacht broker and asked to transfer additional funds. They’ll estimate an amount based on your consumption so far. So, they hopefully won’t have to bother you for money again.
- Is APA included in the charter price?
No, APA is a separate item. Most brokers will provide you with a clear price breakdown. It includes the yacht charter (rental), crew salaries, taxes, and insurance, as well as the APA to differentiate these costs.
- Can the unused APA be refunded?
Yes, the APA is an advance provision allowance. It gives the captain funds to work with during your charter. Your charter agreement should clearly state that any unused portion of the APA will be refunded to you, typically via the payment method you initially used.