What is APA? Understanding Advance Provisioning Allowance

The abbreviation APA stands for Advance Provisioning Allowance and is an important consideration when you are chartering a boat. 

What is the APA? Which expenses does the APA fee include? How can you know how much your APA is going to be?   We explain some of the terminology and procedures around Advance Provisioning Allowance.

Advance Provisioning Allowance:  Understanding APA

Advanced Provisioning Allowance (APA) is a lump sum payment that covers your on board expenses during your yacht charter. While your charter fees include the rental of the yacht, other expenses are additional to the charter fee and these are what comprise APA costs.

An APA is implemented so that your Captain and crew can prepare all of your preferences for your charter. 

When does APA apply?

All-inclusive yacht charters mean you get what they decide is included in the trip.  Therefore, if you want more provisions or requests, you need to pay more, and you need to ask and understand what is actually included in any all-inclusive options.

It's better to take an Advance Provisioning Allowance approach, so you get control over what you want to have on your charter such as food and beverage preferences.

APA gives flexibility for variable expenses and this allowance can increase with the size of the yacht and its services.

What does the Advance Provisioning Allowance cover?

In all charter agreements, you should ensure it is clearly specified what is included in the APA.  Here are some typical items that need clarification regarding APA:

Food & beverages: Charter companies will ask you and your guests the type of food you prefer and the standards you are expecting during your yacht charter. You can request your favourite food, drinks or special meals and your APA will be adjusted to cover the expenses.  This means that the APA can vary significantly whether you opt for high-end premium quality cuisine and beverages including Champagne, rare whiskey etc.

Dockage fees:  Harbour and marina charges.  Mooring your yacht comes with a fee - this can vary depending on many factors such as the size of your boat, the marina itself or the season.  For example, berthing your chartered yacht in high season or at a popular event such as Monaco Grand Prix can increase mooring fees.

Fuel:  Fuel costs can encompass the yacht and any yacht tenders during your charter.  In general, the bigger the yacht the greater the fuel costs.  Fuel costs also depend on the destinations and activities.  The APA does not always include fuel for the motorised water crafts or extra fuel required to resume an itinerary following any itinerary changes due to inclement weather/sea conditions or client-initiated changes.  

Communications:  If you plan to use the internet or satellite communications while on board, the cost of this will be included in the APA.

Delivery fee: If you want to rent the yacht from a different place instead of renting it from the usual location, you must pay the delivery fee. Likewise, if you depart the yacht in a different port instead of its home port, you pay the delivery fee.

Laundry:  Yacht charters usually include laundry and cleaning costs, though it's sometimes one of its extra costs.

Who has access to the APA funds?

An APA Escrow account provides the ability to:

• Access and use the APA funds.  Usually, this is overseen by the Captain who will ensure the yacht is provisioned for and fuelled ahead of your arrival.  Throughout the charter, your Captain and charter broker will keep track of your APA expenses and provide you with a full APA report and receipts, commonly the day before you disembark the vessel so you can view your expenses in a clear manner.
• Pay other expenses requested by the charterer such as rental cars, tours and other activities. 
• Pay out authorised crew tips.

How is APA calculated?

In general, the APA is calculated as a percentage of your yacht charter fee, usually somewhere between 20% and 35% on top of the cost of your yacht charter.

Sailing yachts usually have lower APA than motor yachts, due to fuel cost savings. 

To estimate your APA, it's advisable to pinpoint the type of charter experience you wish to have.  For example, if you plan to cruise extensively, enjoy exquisite food or moor your yacht in high season then you need to allow for a higher APA.

What if my Advance Provisioning Allowance doesn't cover the charter expenses? Or if there are funds left over?

You will receive an estimated APA cost. This reflects the overall spend that the charter expects to meet. In most cases, it will be slightly above the total expected spend, since yachts prefer not to ask for more money during the charter, and you get refunded.  During the charter, you can ask for a status report on your APA items at any time.

If the APA estimate is above your budget, you might need to suggest alternatives that might meet your preferences and personal tastes. If you decide to go over budget, you will be asked to provide the additional finances for this during the charter. 

Is it possible to use any unused APA funds for crew tips?

Absolutely.   The Captain will deduct any APA expenses and will advise you of any remaining funds in the account - this can be used to apply towards discretionary crew tips.    A crew gratuity guidelines table is provided within the APA Escrow Account document to assist the charterer to understand customary crew gratuities.

When do you pay for APA?

The APA is paid in advance of your charter’s commencement date, generally along with your final charter fee instalment. This is mostly done via bank transfer to your charter broker, which then liaises directly with the yacht on your behalf.

A well-prepared budgeted APA can save both expense and frustration at a later date during the charter.  

Have any questions about yacht management or accounting for charter yachts?  Get in touch with us by email: hello@btmaccounting.com

Lead Photo:  Olivier Gryson