Why is APA important?

Advanced Provisioning Allowance (APA) is a crucial concept in yacht charter processes and is commonly used as part of lease agreements. APA is defined as a fund or deposit provided in advance by the charterer to cover any additional expenses that may arise during the charter period. Typically, it amounts to around 30% of the charter rate, although it may vary according to the terms of the contract. This deposit makes the chartering process more organized and manageable. Here are some key points regarding the significance of APA in yacht chartering:

Covering Operational Expenses: APA includes various items such as operational costs incurred during the tour of the rented yacht, fuel, port or marina fees, food and beverage expenses, additional charges based on special requests, and can also be used for crew meals and other related costs. In some cases, the (charterer’s own discretion) tip for the crew’s services throughout the entire tour can also be sourced from APA, as per the agreement between the tenant and the lessor. APA assists in managing all additional costs for the tenant throughout the tour, ensuring the yacht operates smoothly and securely.

Marina and Port Fees: Fees that need to be paid at marinas or ports where the yacht docks are covered by APA. Consolidating payments at various accommodation points along the travel route makes the operation more straightforward.

Flexibility and Convenience: APA provides the tenant with the flexibility to anticipate and manage additional expenses. The tenant can effectively use this fund based on the desired route and planned activities.

Ease of Accounting: Since APA covers nearly all operational expenses, it facilitates calculations and expense tracking between the lessor and the tenant. Regular accounting reports, if requested can be obtained by the tenant throughout the lease period. These reports include details of expenditures with receipts and invoices, making the charter process more transparent and seamless. The tenant and the captain can regularly track daily expenses and the remaining APA balance anytime together.

APA is detailed extensively in yacht charter agreements, specifying how much the tenant needs to pay to cover these expenses for a specific period (charter duration). This enables both the tenant to budget effectively and the lessor to manage operational expenses efficiently.