Dynamic URL Rewrite for Custom

I have a custom post type called Hotels which I woud like to link to using the below url structure: /{country}/{state}/{hotel-name}

I am fetching and inserting posts dynamically, so I do not know the number of countries/states.

The Hotel Name is the slug version of the post title.

I have been banging my head all day trying to get it to work. The below code works to make the links look correct, but then 404s on all posts:

function change_link($permalink, $post)
{
    if ($post-post_type == 'hotels') {
        $country = get_field('location_country', $post-ID);
        $state = get_field('location_state', $post-ID);

        $permalink = get_home_url() . /hotels/
            . (!empty($country) ? slugify($country) . '/' : '')
            . (!empty($state) ? slugify($state) . '/' : '')
            . $post-post_name;
    }
    return $permalink;
}
add_filter('post_type_link', change_link, 10, 2);

I then tried adding a rewrite rule, but I don't fully understand what it is doing and why it is not working:

function generate_rule($wp_rewrite)
{
    add_rewrite_rule(
        '/hotels/([^/].+?)/([^/].+?)/([^;?]+)',
        'index.php?post_type=hotelsname=$matches[3]country=$matches[1]state=$matches[2]',
        'top'
    );
}
add_action('init', 'generate_rule');

Woud be much appreciated if someone can point me in the right direction...