When you charter a yacht for the first time, you often have no idea where to start. Here is a guide for first-timers.
Before choosing the charter for a cruise, make sure you are aware of the costs of this type of holiday. While the charter rate includes some costs, extra expenses like fuel, provision, and mooring fees, cannot be quantified in advance. The agreement varies with charter and destination (Mediterranean, Eastern Mediterranean, Caribbean).
What is the base rate and what does it include?
The base rate of a luxury charter covers the boat – ready to sail and fully-equipped, crew and board included. Catering, cleaning, concierge, laundry and other on-board services are also included. It is like staying at a luxury hotel out at sea! Complying with the regulations, the price also encompasses the yacht’s equipment (found in the boat’s file) and full insurance coverage.
The cost of the charter can vary depending on the type of boat, length, number of cabins, year of construction, model, equipment and crew members. The rate changes depending on when you plan to charter: it generally increases in high season (July and August) compared to the price of chartering during the low season. Some yachts can be rented for special events like Monaco’s Grand Prix, Cannes Film Festival and the MIPIM. On such occasions, a minimum of charter days is required and a different rate is charged that is higher than the low season when the events take place.
VAT is charged for each charter, unless otherwise stated in the regulations associated with the boat type or country of departure.
How to calculate VAT for a yacht charter
Charters in EU countries and some non-EU countries overlooking the Mediterranean are subject to VAT. This is calculated according to the laws of the country of charter departure.
Italy and France offer reduced VAT based on cruise type, if it includes chartering in international waters, the length of the charter, and boat size. Greece and Croatia respectively apply 11,5% and 13% VAT. To encourage nautical sports, the charters departing from Montenegro are not subject to VAT.
According to registration, some boats have VAT exemption in countries like Italy, France, and Greece.
Typologies of agreement for a yacht charter
Different agreements can be concluded, depending on where you charter your boat. The MYBA (Mediterranean Yacht Broker Association) agreement is the most common type and the reference of the yacht market. The MYBA agreement encompasses extra charter fees for provision, fuel, and mooring. The eight-page agreement includes several clauses that guarantee coverage against any accident due to boat defect and/or negligence (clients are, however, always advised to read the full paper for detailed documentation). This makes the MYBA the most widespread agreement for yacht charters.
Other agreements include the CTI (Caribbean Terms Included) in use in the Caribbean for all-inclusive charters of 3 meals and 4 hours of navigation.
Extra fees for chartering: fuel, provisioning, and mooring.
Except for charters that include board or hours of navigation, a charter’s extras encompass fuel, provisioning, and mooring fees.
1 The cost of fuel
Fuel is usually bought at a reduced price, depending on the type of boat and/or country of supply. The cost is measured in the horsepower developed per hour by the main engines and electric generators, when these are disconnected from a landline. Fuel consumption costs per hour are listed in the boat’s file. All details are provided by Silver Star Yachting.
2 Mooring fees
Mooring fees are extras that vary according to destination and season. The captain informs the guests of the charge in advance before confirming it.
Provisioning that include food and beverages is calculated on the basis of the client’s list of preferences, which he passes to the broker and captain a month prior to departure or, for last minute charters, as soon as possible.
APA: the allowance for charter extras
Upon signing the agreement, the Advance Provisioning Allowance (APA) is set. The APA is paid to the broker with the final charter payment, four weeks prior to departure, or, with last minute charters, upon signing the agreement.
The broker passes the APA to the captain who manages the expenditures. He is, in fact, responsible of balancing the account for the client and informing him of all expenditures. At the end of the charter, the captain gives full account of any extra costs incurred and provides receipts of them, refunding any amounts not used. The refund can be made on the spot, or via a wire transfer. It can happen that the APA might need integration. In such a case, the captain informs the guests and the broker before running out of funds and agrees with them on an allowance to cover the rest of the charter.
Usually the APA adds 30% on the base charter rate. It varies depending on the type of boat, consumption, and type of cruise. Sailing yachts add on as little as 20%, while more performative boats 35 or 40%.
Charter payment and management of payments
The MYBA agreement entails that, upon signing the contract, the client pays 50% of the charter, minus VAT and the APA. The final charter payment takes place 4 weeks prior to departure and includes VAT and APA. The payments are handed to the broker who makes the agreement. For last minute charters, or charters confirmed in the 4 weeks preceding the departure, the final payment must be made upon signing the agreement. The broker sends the payment to the subsidiary responsible for the charter minus his commission.
The central broker keeps the payments for the charter plus VAT and sends the APA to the captain. The subsidiary responsible for managing the yacht operates also as a stakeholder, holding the charter’s shares and acting as a guarantor towards the client and the ship owner. The owner of the charter is paid 50% of the rate on the first day of the charter and receives the rest of the payment one day after disembarkation (unless negligence or damage occur that may call for a note of compensation). Clients are invited to read the agreement thoroughly and refer to the broker for further information.
Eating on board
Satisfactory eating experiences are essential to the success of a holiday. It is no different on a charter. Each luxury charter has at least one chef who is willing to satisfy the taste of the guests with a top quality culinary experience.
Naturally, the offer varies according to the type of boat, where space and available cooking tools play an important role in the choice of menu. Before departure, the broker asks the charter guests for a list of culinary preferences and tastes, intolerances and special requests. The chef devises the menu according to this list. The chefs on Silver Start Yachting charters are ready to manage and meet the demands of vegetarian, vegan, celiac, or guests with kosher preferences.