Incentive Fee

What is the definition of Incentive Fee in the hotel industry?

The term Incentive Fee is used to explain a fee that acquire to an investor when his/her fund manager is able to set up returns, above a optional benchmark originally established. Incentive Fees are set to support fund managers to struggle for higher returns. While higher returns may be one optimistic aspect incurring from the Incentive Fee, the fee also promotes rather risky investments. The matter here is that often the fund managers are not held accountable for the losses, only for the gains. This may therefore pilot to investments which aren’t completely in line with the investors finest interests.