In the booming business of wellness clubs and third spaces

A few years ago, Grace Guo began to long for places in New York City where hanging out with friends didn’t necessarily have to involve alcohol.

Guo was newly sober and surrounded by friends who also didn’t want to drink. She said she wanted alternatives to the typical social scene. After some research, she landed on Bathhouse and Othership: social wellness clubs that aim to create communities to improve health.

“Honestly, it just feels like going to a spa together and spending an afternoon together. I think for me it just feels a lot better than staying out late at night,” Guo told CNBC.

She is one of a growing number of people who are turning to membership clubs and other places designed to maintain health while also serving as a place to foster connections.

And these spaces are also developing into booming companies. Bathhouse, which opened in Brooklyn, New York in 2019, told CNBC exclusively that it expects to generate around $120 million in sales by the end of this year. It declined to disclose its other financial information, as did Othership.

Many of these companies are privately owned, but the listed fitness studio chain Life Time also began to focus more on premium wellness a few years ago. While investors initially didn’t like this redistribution of resources, it is now paying off: Life Time shares have more than doubled since October 2023.

Companies old and new are trying to reach consumers like Guo. The 31-year-old said she has noticed an increasing focus on health, well-being and peace in her own social life and those around her, as she seeks so-called third spaces with this focus.

“I’m wondering: Where can I try to join a community, or where can I go to express a particular interest that I have and find like-minded people?” Guo said. “It’s about finding a group of like-minded people, but then also having the space and novelty to try something or pursue something.”

At Othership, Guo said the environment of health-focused socializing between the sauna, the cold bath and choosing a popular time slot in the evening appealed to her.

“It’s really important to have a space where we can go to break ourselves out of our routine and complacency, and I think the most important thing is probably just the fact that it overcomes a lot of the inertia of doing something,” Guo said.

“Loneliness is an epidemic”

Bathhouse pools

Source: Bathhouse

The concept of third spaces is not new. The term was first coined by sociologist Ray Oldenburg in his 1989 book “The Great Good Place” and refers to spaces outside of home, or the first place, and work, the second place, where people come together and build relationships.

This definition included places such as neighborhood cafes, libraries, bars, and more where people of different backgrounds came together in an informal setting with relatively low barriers to entry.

But sometime in recent years, this definition has evolved and the importance of third spaces has increased.

Richard Kyte, a professor at Viterbo University in Wisconsin and author of “Finding Your Third Place,” said he has been teaching courses on third places for nearly two decades but has only noticed the term becoming mainstream in recent years.

That tipping point, Kyte said, also coincided with the pandemic, which put the world into lockdown and virtually eliminated social gatherings for a time but redefined them in the long term.

“During this time, we suddenly started talking more about the cost of loneliness, the cost of social isolation. During the pandemic, we realized that’s not healthy,” Kyte told CNBC. “And at the same time that we realized we needed these places more, we saw so many of them closing. That sparked a new interest.”

It’s a trend also reinforced by an increasingly digital society, he added, as younger generations crave more than just social media connections despite the rise of artificial intelligence and chatbots.

“We’ve made all these huge investments in technology that make it easier and more desirable to be independent,” Kyte said, pointing to AI companies that promote products masquerading as friends. “If we have people turning more to their screens rather than seeking fulfillment through social interaction, all of those people are just going to be taken out of the pool.”

According to Cigna’s 2025 Loneliness in America report, 67% of Gen Zers and 65% of Millennials reported feeling lonely. A 2024 Harvard survey found that 67% of adults experience social and emotional loneliness because they do not belong to a meaningful group.

Harry Taylor initially founded Othership with his wife and friends to create a space that embraced the wellness trend while combating isolation.

“We understand that there is a huge market for meeting other people. Loneliness is an epidemic right now,” Taylor told CNBC. “We realized that just by doing that, people could come together and just be themselves and be vulnerable.”

What is old is new

Third rooms have evolved to encompass specific purposes, justifying the price often associated with them, with some membership clubs earning thousands of dollars per month.

Wellness, in particular, has boomed recently, becoming one of the top gifting categories this past holiday season. Equinox CEO Harvey Spevak told CNBC last month that “health is the new luxury,” with the global wellness market expected to reach nearly $10 trillion by 2030, according to estimates from the Global Wellness Institute.

Bathhouse, which operates 90,000 square foot facilities in New York City, offers a wellness experience based on Europe’s bathhouse heritage. The space features saunas and cold dives, both guided and unguided, starting at $40 for a trial session. The company’s two New York locations serve around 1,000 customers every day.

“It was really obvious that there wasn’t a bathhouse-like concept that was truly aimed at a modern consumer, especially in America,” co-founder Travis Talmadge told CNBC.

Talmadge said he and his co-founder focused on creating a human experience, touching everyone’s body while building a community around the shared activities.

“Our spaces are really large in scale, so the nice thing about it is that everyone feels like a background actor on set where there are just so many people moving around,” Talmadge said. “You can have this really personal time, either alone or with someone else, but then you’re in an environment where a lot of people are doing the same thing.”

Talmadge said the company has seen “excess demand” and is operating at a “very healthy margin” and plans to open seven more locations by 2027.

It is just one of many wellness areas that are becoming increasingly popular.

Othership also draws on a wellness mindset, integrating practices from different cultures to address the “physical, mental, emotional and spiritual.” The company has locations in New York and Canada and plans further growth.

At Othership, members can choose between three options: a free-flow session, which allows members to use the space as they wish; Courses that alternate between saunas and cold dives with group-led activities; and social gatherings, imitating clubs without alcohol in order to be present.

Co-founder Taylor said that through Othership, he has seen customers create new friend groups, propose to their partners in the sauna, and find belonging with others while strengthening their own health.

Creating alcohol-free spaces was one of the Othership founders’ goals when developing the vision. Othership now hosts comedians, live musicians and more in its saunas, replicating similar spaces found in big cities that are often associated with alcohol.

“There is so much social media that gives us the false impression of social engagement and interaction, but so many of us have found ourselves doomscrolling to almost do the opposite,” Taylor said. “As we all need social saturation as humans, a gap is created. Therefore, it is coming together and genuinely interacting with each other that truly creates a deep sense of belonging.”

Building community

Glo30 Skin Care Studio.

Courtesy: Arleen Lamba

Wellness communities can also emerge in other ways. Glo30, a membership studio founded 13 years ago with locations across the country, offers members personalized skin care treatments every 30 days and creates a coordinated schedule with other members to foster community.

“Building community is not just about achieving results [feeling] good, but also being able to have common experiences and share their feelings,” Arleen Lamba, founder and CEO of Glo30, told CNBC.

While urban cities like New York and Los Angeles are seeing a boom in wellness clubs, Lamba says their more than 100 locations represent the in-between, in places like Texas, Arizona, North Carolina and elsewhere.

Each Glo30 appointment is scheduled on the hour at each location to create more opportunities for social connection, Lamba said.

“When people come into the studio, they leave the studio, and we see that they would recognize each other and actually make new friends,” she said, adding that the company has seen more and more social groups forming in the treatment rooms, especially after the pandemic.

Lamba said she has observed that the desire for social connection has increased with the advent of social media, but that creating community can often happen in unconventional places like Glo30. At the same time, this social interaction is not as “overwhelming” as other venues such as parties or large group events, allowing for an intimate social gathering, she said.

Lamba said Glo30’s number of franchise units in development has increased by 67.5% over the past two years as demand for its services has increased.

But the boom in third spaces also goes beyond wellness. Exclusive restaurant memberships, gyms, creative spaces, social clubs and more are becoming increasingly popular as consumers look for ways to build community outside of their homes and offices.

At Glo30, Lamba said she has seen every customer base at the company’s locations, from families to girl groups to couples.

“The third room is interesting because it creates a real connection,” she said. “We witness someone’s life – their highs, their lows, their mids – and we are the constant, and that’s what the third room is all about to me: No matter what kind of day you’ve had out there, good, bad or mediocre, this room is yours. And when you come into this room, people will know you, see you, appreciate you and be glad you’re there.”

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