The front desk staff are not inside the 3%. A third-party management fee pays the management company, and every dollar of hotel-level cost sits on the hotel's own books. On a 48-key select service property, payroll and related benefits are usually the single largest expense line and can run somewhere around a quarter to a third of revenue depending on how much service the property offers, so the operator's fee is a small slice of what it costs to run the building.
Two terms worth keeping separate, because people mix them constantly. A franchise or brand agreement is what lets you call the hotel a Hampton or a Comfort, and it charges royalty and marketing fees calculated on rooms revenue. A management agreement is a separate contract with a company that actually staffs and operates the hotel day to day. You can be flagged and self-managed, or unbranded and third-party managed. In market talk people say "my management company" loosely and sometimes mean the brand, which is where the confusion starts.
The part that matters more than the fee percentage is who employs the people. In many agreements the hotel employees are technically employees of the owning entity, with the manager acting as agent, and in others they're the manager's employees. That affects who carries employment liability and how a termination plays out, and how it works depends on the specific contract and your state's employment law, so have a lawyer read the actual document before you sign anything. Also check the term and what it costs you to fire them, since a fee that low often comes with a long lock-in.
