What is the first thing that comes to mind when you think of a luxury yacht charter? Probably sun, sea, incredible food, fun, and relaxation, right? And you’d be correct (that and so much more)! Terms and contracts don’t really fit in this picture. However, to get to the fun and relaxation, there is a little paperwork that needs to happen. At first glance this can seem confusing, possibly even overwhelming, but rest assured, it’s not as scary as it seems.
One of our core values at Otium Yachts is TRUST, so we try to make everything as simple and transparent as possible. We want you to feel confident in us as your broker and fully informed about the process and details so there are no surprises at sea. So, once it’s all said and done (and signed), all that’s left to do is enjoy your holiday!
Yacht Chartering, Rate, and Terms
Yacht Chartering refers to the hiring out of a yacht (by the owner) to a third party – the charterer. There are many different types of charter contracts, various components, and different players involved.
Yacht Charter Rate is the price available to the public to charter a yacht. The yacht charter rate depends on various factors, such as the season period, yacht type, model, size, age, and equipment. The Yacht charter rate also depends on the terms under which the yacht operates. Once you have decided to charter a yacht, your broker will present you with different options to choose from depending on your preferences and budget. Some yachts may offer certain inclusions and additional services to choose from, such as food and beverage options. While with other yachts, the charter rate is quoted with all expenses excluded – to be charged from the APA (Advanced Provisioning Allowance).
Generally, there are two types of terms under which a yacht operates – the Western Mediterranean Terms (WMT) often referred to as MYBA terms, and the Eastern Mediterranean Terms (EMT) known as Gulet terms.
Understanding MYBA and Gulet Terms
Western Mediterranean Terms (WMT), a.k.a MYBA Terms
This is where it can start to seem confusing but let us explain. First and foremost, let us say that both terms – MYBA and Gulet, have their benefits. While clients may sign a MYBA contract (our preferred contract, we’ll speak more about this in another blog), the yacht can still operate under Gulet or MYBA terms. And it is the yacht owner who decides under which terms they operate (knowing their clients best).
In the MYBA agreement (once called the Western Med Terms), the charter rate includes the hire of the yacht with all its equipment in working order, tools, stores, cleaning materials, the crew’s wages, the crew’s expenses onboard, the insurance of the yacht and tourist taxes. Value-added tax (VAT) and all other operating expenses are payable extra by the charterer, such as fuel for engines and generators, fuel for jet ski, tender and tender-operated water toys, harbor fees & taxes, food, drinks, and other expenses that are not included in the rate. These extra costs are commonly paid through APA (Advance Provisioning Allowance) which is usually 30% of a charter rate.
Mediterranean Terms (EMT) a.k.a. Gulet Terms
Within Gulet terms (EMT), the charter rate includes; accommodation on the vessel, crew and their expenses, fuel for up to 4 hours cruising per day, fuel for generators (usually limited to A/C usage), public harbour fees & taxes, use of recreational equipment, tourist taxes, VAT. Obligatory extra costs in these terms are Food options (Half board or Full board) and Beverage options (Alcoholic or Non-alcoholic packages). There are also common additional costs such as: port, marina fees, anchorages, day trips, delivery fee (if appropriate), extra navigation hours, fuel for tender-operated watersports and any other cost not specifically mentioned as included.
Benefits of the MYBA Terms
MYBA terms are best explained as “plus all expenses”. These terms allow an ‘a la carte’ approach to services – as opposed to fixed packages (like in the Gulet terms, but we’ll get to that). Generally speaking, it is Motor Yachts and Luxury Yachts who have a charter rate of 50,000 euros plus, who are under MYBA terms. Why? Because typically, the clients who charter such yachts, like to have flexibility in costs. For example, it gives clients more control over the food and drinks that are available aboard.
Good to know: The Captain and crew are in constant communication with the clients regarding the route, itinerary, excursions, meals, and any other special requests. Detailed accounts of costs are kept, and the Captain can run through the costs with the Primary charterer (the main person/s paying for the yacht charter) as often as they like. It is also worth noting, that the retail cost for food and drinks purchased to use during a charter is what is charged to the client – there is no markup. And, if a client requests a selection of fine wines, the invoice should be finalized with the client before confirmation of purchase – as some unique and international wines can be more expensive to get in Croatia than what the client may be used to. Often, it will be requested that this is paid separately to the APA, so as to ensure that the APA covers the majority of the costs of the charter.
In short, the MYBA terms puts more control in the Charterer’s hands. It makes no sense to have all-inclusive packages when clients are usually more specific in their wishes. The APA usually covers the majority, if not all the costs, and as we already said, the client will be kept up to date with costs throughout the charter.
Benefit of the Gulet Terms
Some yachts (mostly motorsailers and gulets) are contracted under the EMT, ‘Gulet Terms’, best described as a mostly “all-inclusive package”. As mentioned above, there is more included in the initial charter rate price, including VAT. This ‘all-inclusive’ approach typically suits clients that are generally more mindful of expenses and want to plan costs in advance. Often, these groups are splitting costs between several parties, so it helps them budget for their holiday.
And please don’t take this to mean that guests don’t have any control, of course, they do. The captain and crew plan the trip based on your preference sheet – a good time to emphasize that this is why it is important you fill out your preference sheet in time! Through your preference sheet or amendments made with your broker, guests can make special requests for every aspect of their trip – some will fall under the inclusions, and others will be charged extra. This can all be discussed with your broker in detail when you book.
In summary, Gulet terms allow guests to know more costs upfront so they can plan their trip and budget.
Different Terms Suit Different Yachts and Clients Better
Sometimes clients who are used to chartering Luxury yachts and working with MYBA terms get confused when they charter a yacht that operates under Gulet terms, and vice versa. This is why we wanted to highlight that there is nothing ‘unfair’ at play. It is simply that different terms suit different yachts and clients better.
Once you are ready to book your chosen yacht from our fleet or offer, we will provide you with the full details of the charter terms – MYBA or Gulet terms, depending on the yacht. Having been in communication with you and understanding your wishes, the agreement will be presented with or without amendments. For example, an amendment could be a non-disclosure agreement if privacy is important to you. Under Gulet terms, maybe an amendment is a special dinner or some fine wines that don’t fall within the food and beverage package. We will do our best to discuss everything with you in detail to make sure you understand and that your sailing holiday meets your expectations.
Yacht Charter Agreement
Once you have decided to charter a yacht, your broker will create a contract with all the details – as offered and agreed.
As with any contract, it goes without saying that you should read it carefully. And, as your brokers, we will do everything we can to a) make it simple for you and b) tailor the terms (within reason) to meet your needs and expectations.
There is more to talk about in regard to MYBA contracts (our preferred contract), but this is more detailed, so we have put all of this information in a separate blog. Hopefully, now you are a little clearer about the terms under which a yacht charters.
Your Trusted Partner in Creating an Unforgettable (and stress-free) Holiday
With years of experience in the yachting industry, we pride ourselves on understanding our clients and creating tailor-made itineraries. And, as we’ve mentioned many times, we only work with trusted yachts and yacht owners who we have been in partnership with for years. Trust is the foundation of our philosophy and company, and it flows into everything we do – even the paperwork! Feel free to contact us if you have any questions, and trust that we will handle your inquiry with care and professionalism from beginning to end. Otium Yachts, we are here for you.