Inside the booming business of health clubs and third-party spaces

A few years ago, Grace Gu began to long for places in New York City where spending time with friends didn’t require drinking alcohol.

Newly sober and surrounded by friends who also chose not to drink, Guo said she wanted alternatives to the typical social scene. After doing some research, I landed on Bathhouse and Othership: social health clubs designed to create communities that improve health.

“Honestly, it’s like going to a spa together and spending the afternoon together. I think for me, it feels much better instead of staying out late at night,” Guo told CNBC.

She’s one of a growing number of people looking for membership clubs and other places centered around staying healthy while also serving as a place to foster connection.

These spaces have become thriving businesses as well. Bathhouse, which opened in 2019 in Brooklyn, New York, told CNBC exclusively that it expects its revenue to reach about $120 million by the end of this year. It declined to disclose any of its other financial data, as did Othership.

Many of these types of companies are privately owned, but publicly traded gym chain Life Time also began doubling down on its efforts in premium health a few years ago. Although investors initially disliked this reallocation of resources, it is now paying off, with Life Time stock more than doubling since October 2023.

Old and new companies are trying to reach consumers like Guo. The 31-year-old said she has noticed an increased focus on health, wellness and peace in her social life and in those around her, as she seeks out so-called third spaces with this focus.

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

At Othership, between spending time in the sauna, cold plunge, and choosing a popular evening time slot, Jo said the health-focused socializing environment spoke to her.

“Having the space to go where it kind of shocks us out of our routine and complacency is really important, and I think the biggest thing is probably the fact that it overcomes a lot of the inertia of doing something,” Guo said.

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, to refer to spaces outside home, or place one, and work, place two, where people congregate and form relationships.

This definition has come to include places such as neighborhood cafés, libraries, bars, etc., where people from different backgrounds come together in an informal environment with relatively low barriers to access.

But somewhere in the past few years, this definition has evolved, and the importance of third spaces has blossomed.

Richard Kite, 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 noted that the term has only become mainstream in the past few years.

This turning point also coincided with the pandemic, which sent the world into lockdowns and virtually canceled social gatherings for a while while redefining them in the long term, Kite said.

“During that period, suddenly, we were talking more about the cost of loneliness, the cost of social isolation. We really realized during the pandemic that this wasn’t healthy,” Kate told CNBC. “At the same time that we were noticing that we needed these places more, we were seeing that a lot of them were closing their doors. That kind of stimulated renewed interest.”

He added that this trend has also been exacerbated by the increasingly advanced digital society, with younger generations yearning for more than just social media communication even with the advent of artificial intelligence and chatbots.

“We have all this huge investment in technology that makes it easier and more desirable to be autonomous,” Kite said, citing AI companies promoting products pretending to be friends. “When we have people turning more to their screens instead of seeking satisfaction through social interaction, it takes all those people out of the fold.”

According to Cigna’s 2025 “Loneliness in America” ​​report, 67% of Generation Z reported feeling lonely, along with 65% of Millennials. A 2024 Harvard University survey found that 67% of adults feel socially and emotionally lonely because they are not part of meaningful groups.

Harry Taylor first founded Othership alongside his wife and friends to create a space that embraces the healthy trend while combating that isolation.

“We realize there’s a huge market for people to meet other people. Loneliness is an epidemic right now,” Taylor told CNBC. “We realized, by doing this, that it had the potential for people to come together and be themselves, and be vulnerable.”

Third spaces have evolved to include specific purposes, justifying the price that often comes with them, since some membership clubs can run into the thousands of dollars per month.

Health, specifically, has seen a recent boom, becoming one of the top gifting categories this past holiday season. “Health is the new well-being,” Equinox CEO Harvey Spivak told CNBC last month, with the global wellness market expected to reach nearly $10 trillion by 2030, according to estimates from the Global Wellness Institute.

Bathhouse, which operates nearly 90,000 square feet of facilities in New York City, offers a spa experience that draws on the heritage of public baths in Europe. The space has saunas and cold plunges, guided and unguided, starting at $40 for a live session. The company’s two New York locations receive approximately 1,000 customers daily.

“It was really clear that there wasn’t a concept like a public restroom that was really geared toward the modern consumer, especially in America,” co-founder Travis Tallmadge told CNBC.

Tallmadge said he and his co-founder focused on creating a human experience, tapping into each person’s body while building community around shared activities.

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

The company has seen “excess demand” and is operating at a “very healthy margin,” with plans to open seven more locations through 2027, Tallmadge said.

It’s just one of many wellness spaces that are growing in popularity.

Othership also taps into a wellness mindset, integrating practices from different cultures to address the “physical, mental, emotional and spiritual” aspects. It has locations in New York and Canada, with plans for further growth.

At Othership, members can choose from three options: a free-flow session, designed to allow members to use the space however they want; Classes that alternate between saunas and cold plunges with group activities; And social, imitating non-alcoholic clubs in an attempt to attend.

Co-founder Taylor said through Othership, he’s seen clients form new friend groups, propose to their sauna partners and find belonging with others while also working to enhance their health.

Creating alcohol-free spaces was one of the goals of Othership’s founders when creating the vision. Othership now hosts live comedians, musicians and more in its saunas to mimic similar spaces popping up in major cities that are often associated with alcohol.

“There’s a lot of social media that gives us the false perception that there’s social engagement and interaction, but a lot of us have experienced when we go through devastation, it almost does the opposite,” Taylor said. “There’s a void in the wake of this social fulfillment that we all need as human beings, so it’s coming together and being real with each other that really creates a deep sense of belonging.”

Wellness communities can take shape in other ways, too. Glo30, a 13-year-old membership studio with locations across the country, offers personalized skincare treatments to members every 30 days, creating a schedule that aligns with other members to foster community.

“Building community is not just about getting results [feeling] “Good, but also being able to have commonalities in their experiences and share what they’re feeling,” Arlene Lamba, founder and CEO of Glo30, told CNBC.

While urban cities like New York and Los Angeles have seen a boom in health clubs, Lamba said her more than 100 locations represent something in between, in places like Texas, Arizona, North Carolina and others.

Each appointment with Glo30 is scheduled around the clock at each location to create more opportunities for socialization, Lamba said.

“As people enter the studio, people also leave the studio, and we realize that they are getting to know each other, and they will actually make new friends,” she said, adding that especially after the pandemic, the company has seen an increasing number of social groups forming in the treatment rooms.

Lamba said she’s noticed an increased desire to socialize with the advent of social media, but creating community can often happen in non-traditional spaces, like Glo30. At the same time, this social interaction is not as “overwhelming” as other settings such as parties or large group events, allowing for intimate socializing.

In the past two years, Lamba said the number of Glo30 franchise units under development has increased by 67.5% as it sees more demand for its services.

The prosperity of third spaces goes beyond wellness as well. Exclusive memberships to restaurants, gyms, creative spaces, social clubs, and more are gaining more popularity as consumers look for ways to build community outside of their homes and offices.

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

“The third space is interesting because it creates a real connection,” she said. “We have to be witnesses to someone’s life — their highs, their lows, their averages — and we are the constant, and that, to me, is what Third Space means: No matter what kind of day you had there, whether it was good, bad or average, that space belongs to you. And when you come into that space, people will know you, see you, appreciate you, and they will be happy to have you there.”