One of the most common questions posed to charter brokers is, “What does, ‘plus all expenses’ mean? “It’s a fair question, and critical to understand the implications, since the cost to arrange a Mediterranean yacht charter holiday is far more than the prices posted on most charter brokers’ websites.Megayachts – the large, ultra-luxurious vessels that we associate with cruising the Côte d’Azur in the South of France, and docked along the quay in Monte Carlo for Monaco Grand Prix yacht charters – set a rate for the rental of the yacht and the crew, then list the price as, “Plus running expenses.” This simply means that the charterer pays a set price for the yacht, and is also responsible to cover ALL costs associated with the operation of the yacht while the charterer and his/her guests are onboard.
Typical running expenses incurred during a charter are food, beverages, dockage, and fuel.
Depending upon the size of the yacht and the charterer’s penchant for elaborate menus, extended cruising, and vintage alcohols, these running expenses can vary greatly from yacht to yacht, and from charterer to charterer.
You might ask, “When and how do you pay for these expenses, especially since it is hard to itemize them prior to the conclusion of the trip?” Enter the concept of the “Advance Provisioning Allowance.”
The Advance Provisioning Allowance, or “APA” for short, is a deposit paid by the charterer and collected by the yacht’s skipper prior to the commencement of the superyacht holiday. These funds are held by the skipper and dispersed during the course of the charter to cover the ongoing running expenses as they occur.
During the charter, the captain will provide a running account of the usage of the funds and, at the conclusion of the voyage, the captain will present an itemized accounting of expenses to the charterer, along with the refund of any unused funds.
If the APA balance runs low during the charter, the client is expected to provide the captain a sufficient amount in cash to cover the needs for the remainder of the charter. Many charterers prefer not to carry quantities of cash, and their charter broker can hold additional funds and release them, via bank wire transfer, to the captain as needed.
Before you book your yacht charter, ask your broker to give you a solid estimate of the running expenses that might be incurred. Your broker will take into account the food and beverage preferences you have requested, along with how much cruising you wish to do (which will determine the amount, and anticipated cost, of fuel needed), to come up with an estimate of your expenses.
There are numerous variables to estimating running expenses, and the computation is best tabulated by your broker and the yacht’s skipper; for example, depending upon local market availability in your desired cruising ground, food prices may vary greatly from your hometown. Dockage can range from no fees when anchored away from shore, to thousands of dollars per day, when docked at exclusive marinas. For special events, like Cannes Film Festival yacht charters, dockage can run two to three times the standard rate. Fuel costs are important to estimate as well, and can skyrocket depending upon how fast and how far you cruise.
Editor’s note – fuel is also charged for the yacht’s generators when not connected to shore power, as well as for tenders and water toys (so you’ll pay for the fuel used while zipping around on the waverunners).
As a general rule of thumb, the APA requested for sailing yachts is approx 20% of the yacht’s listed charter price, and for motoryachts, the average APA jumps to 30-40%. Here’s an example of the anticipated total cost of a proposed Italian yacht charter vacation for a fictitious client and nine guests for one week on a 180 foot Trinity yacht charter vessel:
Motor Yacht Rental € 350,000
Advance Provisioning Allowance (APA)* 122,500
Total Cost € 472,500
*estimated at 35% by the charter broker
after discussing the charterer’s preferences
as to food, drinks, and desired itinerary.
In actuality, there is most likely one more variable in terms of the actual cost of a charter – the “optional” crew gratuity. Gratuities for exceptional service are routine in the charter industry, and charterers who believe in tipping should remember to budget for this optional expense.
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