I've been enquiring about chartering a specific yacht and in the paperwork they mention an APA under the expenses section. What exactly does APA stand for and how do I know if I'm paying the right amount?
APA (Advance Provisioning Allowance) was designed to enable charterers to manage their expenses through a clear and trackable arrangement. The charter fee you will be quoted is for the hire of the yacht and crew only, all other expenses are in addition to the initial charter fee. The APA is the standard arrangement for paying all expenses during your yacht charter.
It is a straightforward way of creating a petty cash account for the Captain to cover all operating expenses including fuel, port fees, transfers to and from the vessel, food, drink, communications, as well as any special requests and incidentals on your behalf. The Captain will make all of these payments out of this account and must keep all receipts and balance the account for you. There are no mark ups on the APA and you can review the expenditure at any time.
Any credit that remains at the end of your charter will be reimbursed to you in full in cash, and likewise anything outstanding that needs to be paid is to be issued to the Captain by the charterer in cash prior to disembarkation.
Your Captain should make every effort to warn you in advance if it looks like your expenses will exceed your APA.
The total amount of APA is estimated in advance of your charter and is typically calculated as a percentage of the total charter fee, usually 20-25% for a sailing yacht and 30-35% for a motor yacht, though this does of course depend on the charter parties tastes and requirements, the extent of your itinerary and the number of guests, and so could end up being far less or far greater than the estimation.
Under standard MYBA terms and conditions, the APA should be paid at the same time as issuing the final charter payment. This will then permit the Captain and Crew to plan in advance of departure.
Charterers can request an estimated APA amount from the yacht broker based on their on board expectations. The APA is to be paid approximately one month prior to boarding the charter yacht and is paid directly to the captain of the yacht.