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The Advance Provisioning Allowance (APA) is an important factor to consider when you are chartering a yacht. Yet, the abbreviation can be confusing when you are not familiar with yacht charters.
So what is the APA? Which expenses does the APA calculation include? How can you know how much your APA is going to be?
This guide provides you all the information you need to know about the Advance Provisioning Allowance so that you can plan how much your yacht charter is going to cost beforehand and avoid bad surprises.
What is the definition of the Advance Provisioning Allowance APA in yacht charter?
The abbreviation APA stands for Advance Provisioning Allowance. The APA is an advance payment that covers variable expenses that can arise during your yacht charter.
As the name implies, the APA is an allowance based on an estimation. Its main objective is to simplify everyone’s life onboard.
The captain has access to some funds to cover day to day variable expenses that are part of operating a yacht. That way, you don’t need to give your credit card, cash or wire money every time an expense occurs during your yacht charter.
At the end of your cruise, you receive a bill with the summary of all expenses. If you did not use all your APA, the captain returns the remaining funds.
On the other hand, if you spent above your initial APA, you will have to pay the difference.
Which expenses do the Advance Provisioning Allowance include?
APA calculations include variable expenses likely to arise during the charter of your yacht. These variable expenses largely depend on the sort of yachting experience you are expecting for your trip. It is possible to have very different Advance Provisioning Allowance while renting the same boat if the expectations for the trip are widely different.
Here is a breakdown of the most common and important factors that can make your APA vary significantly.
A yacht needs fuel to sail, and the bigger the yacht, the more fuel it needs to power it. But size is not the only matter when it comes to fuel consumption. Your fuel expenses, and therefore your APA, won’t be the same if you charter a yacht to sail to nearby bays compared to if you are planning on crossing an ocean.
Similarly, sailing yachts tend to use less fuel than their motor yachts counterparts.
The initial location of the boat is an important factor as well. If the yacht has to travel hundreds of kilometers to reach the starting point of your charter, the APA will include this delivery fee.
Food and catering onboard
One of the main expense categories while chartering a yacht is of course food. Charter companies will ask you what kind of cuisine you appreciate and the standards you are expecting during your cruise. Depending on your answers, expenses from this category can influence the APA amount.
Some will prefer their food to be simple onboard to keep their APA low, while others will want to live the yacht experience to its fullest potential by allowing a large chunk of their APA to this category. To each their own.
If you plan on celebrating events onboard such as birthday, new year’s eve or honeymoon, you may need to increase your APA to allow some budget for these special moments.
Alcohol, beverages and cigars
Similarly to food and catering expenses, alcohol, beverages and even cigars can be included in your APA. Your allowance can therefore vary significantly whether you are an enthusiast of finest wines, whiskies and cigars or not.
Mooring your yacht comes with a fee, that can vary depending on numerous factors such as the size of your yacht, the harbour itself or the season.
For example, mooring your chartered yacht in Monaco harbour can range from 50€ to more than 2000€ a day depending on the size of your yacht and whether or not it is high season. Harbours sometimes charge boats with more than one hull extra because of the space they use.
When you are in the middle of the ocean, you rarely benefit from 4G network or fiber connexion. Since all communications have to be using satellites, this can quickly increase your budget. Your APA will not be the same whether you plan a yacht trip cut down from modern communications or if you plan on working or streaming your favorite series while onboard.
Although it’s rarely the main expense of your APA as your yacht charter usually includes laundry and cleaning, it is sometimes one of its extra components, along various small expenses alike.
Which expenses are NOT included in Advance Provisioning Allowance calculation?
Now that you know which expenses the advance provisioning allowance include, let’s see the ones that are not part of your APA calculation.
When you charter a yacht, the rental price is not variable, and is therefore not a part of your APA.
The crew salary comes together with the yacht rental when you are chartering a crewed yacht. So it is not a part of your APA either.
In most cases, the charter price of your yacht includes yacht rental and its crew.
Taxes and VAT
Taxes and VAT are determined in advance before you start sailing, and are paid directly to the receiving entity. As such, they are neither not a part of the yacht charter price, and not a part of your APA. They are a separate cost that only depends on where you are planning to go.
Charterer liability insurance, cancellation insurance or medical travel insurance are expenses that included in your APA as they are not a part of day-to-day operating expenses on the yacht. However, it’s important to note that the cancellation insurance can cover your Advance Provisioning Allowance if you have to cancel your trip.
How is my APA spent?
Your APA is a fund available for your captain or your charter company. It is therefore the equivalent of a bank account at their disposal for any expenses onboard.
The captain records any transaction that occurs and can inform you accordingly. All expenses from your APA are completely transparent. If you want to know how much of your APA is remaining or where it has been spent, the information is always at your fingertips.
Do all yacht charters need an Advance Provisioning Allowance?
The Advance Provisioning Allowance doesn’t come automatically with all boat charters. APA is usually necessary for crewed yacht charters as they provide more services. The need to have an allowance for variable expenses increases with the size of the yacht and its services. On luxury yacht charters, the APA is almost always automatic.
For bareboat yacht rentals, yacht charter with skipper or small crewed yacht charters, the APA is not automatic. But we still recommend to have one as it’s a convenient way to keep track of your expenses without having to take care of them by yourself.
How can I estimate my APA?
The usual advance provisioning allowance brackets
First, you can consider that for most yacht charters, APA is usually somewhere between 20% and 40% on top of the cost of your yacht charter.
Sailboats are usually using lower APA as their sails make you save some fuel costs. So you can expect sailing yachts to have APA at around 20-25% on top of their charter price.
Motor yachts tend to use more fuel, so they will usually be on the higher end of the bracket : between 30% and 40% of their charter price.
The type of travelling experience you expect to determine your APA
Most expenses depend on what you expect from your cruise.
If you plan to do some islands hopping or crossing oceans, the fuel consumption might be an important part of your APA. Especially on a motor yacht.
If you are onboard with a group enjoying luxury food, finest wines paired with most exquisite cigars, then your APA might be higher than usual as well.
If you plan on mooring your yacht in the highest season in a prestigious harbour, then your APA will need to be higher.
To estimate precisely your APA, try to picture clearly what kind of yacht charter experience you are envisioning so that your chartering company has all the information they need.
Use our APA calculator to estimate the likely brackets of your yacht charter cost based on your projects.