Inside the booming business of wellness clubs and third spaces

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

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

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

She’s one of a growing number of people seeking out membership clubs and other places that are structured around maintaining health while also acting as a spot to foster connection.

And those spaces are becoming booming businesses, too. Bathhouse, which opened in 2019 in Brooklyn, New York, told CNBC exclusively that it expects to hit around $120 million in revenue by the end of this year. It declined to disclose any of its other financials, as did Othership.

Many of these types of companies are privately held, but publicly traded gym chain Life Time also began doubling down on premium wellness a few years ago. While investors initially did not like that reallocation of resources, it’s now paying off, with Life Time’s stock more than doubling since October 2023.

Companies old and new are trying to reach consumers like Guo. The 31-year-old said she’s seen an increased focus on health, wellness and peacefulness in her own social life and in those around her, as she searches for so-called third spaces with that focus.

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

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

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

The concept of third spaces isn’t new. The term was first coined by sociologist Ray Oldenburg in his 1989 book, “The Great Good Place,” to refer to spaces outside of the home, or the first place, and work, the second place, where people gather and form relationships.

That definition came to encompass places like neighborhood coffee shops, libraries, bars and more, where people from different backgrounds came together in an informal setting with relatively low barriers to access.

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

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

That turning point, Kyte said, also coincided with the pandemic, which sent the world into lockdowns and practically eliminated social gatherings for a period while redefining them for the long term.

“During that time, all of a sudden, we were talking more about the cost of loneliness, the cost of social isolation. It really came home to us during the pandemic that this was not healthy,” Kyte told CNBC. “And at the same time that we were noticing that we need these places more, we were seeing that so many of them were closing. That kind of spurred a renewed interest.”

It’s a trend that’s also been compounded by an increasingly digital-forward society, he added, as younger generations crave more than just social media connections even with the rise of artificial intelligence and chatbots.

“We’ve got all of this huge investment in technology that increases the ease and desirability of being independent,” Kyte said, citing AI companies promoting products that pose as friends. “When we have people turning more to their screens instead of looking to find fulfillment through social interaction, it just takes all these people out of the pool.”

According to Cigna’s 2025 “Loneliness in America” report, 67% of Gen Zers reported feeling lonely, along with 65% of millennials. A 2024 Harvard survey found that 67% of adults feel social and emotional loneliness because they are not part of meaningful groups.

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

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

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

Wellness, specifically, has seen a recent boom, becoming one of the top categories for gifting items last holiday season. Equinox chairman 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 roughly 90,000 square feet of facilities in New York City, offers a wellness experience based on the bathhouse legacy of Europe. The space has saunas and cold plunges, both guided and unguided, starting at $40 for a drop-in session. The company’s two New York locations see roughly 1,000 customers each day.

“It was really apparent that there was no bathhouse-like concept that was really oriented towards a modern consumer, especially not in America,” co-founder Travis Talmadge told CNBC.

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

“Our spaces are really large scale, so one of the nice things is that everybody kind of feels like a background actor on set, where there’s just so many people moving around,” Talmadge said. “You can have this really personal time, either by yourself or with somebody else, but then you’re in this environment with a lot of people doing the same thing.”

Talmadge said the company has seen a “surplus of demand” and runs at a “very healthy margin,” with plans to open seven more locations through 2027.

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

Othership is also tapping into a wellness mindset, incorporating practices from various cultures to address the “physical, mental emotional and spiritual.” It has locations in New York and Canada, with plans for more growth.

At Othership, members can choose between three options: a free-flow session, designed to allow members to use the space however they want; classes, which alternate between saunas and cold plunges with group-led activities; and socials, imitating clubs without the alcohol in an effort to be present.

Co-founder Taylor said through Othership, he’s seen customers form new friend groups, propose to their partners in the sauna and find belonging with others while also fueling their own health.

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

“There’s so much social media, which gives us the false perception that there’s social engagement and interaction, but so many of us have experienced when we’re doomscrolling, it almost even does the opposite,” Taylor said. “There’s a void in the wake of that social satiation that we all require as humans, so it’s that coming together and just being so real with one another that really creates a deep sense of belonging.”

Wellness communities can form in other ways, too. Glo30, a membership studio founded 13 years ago with locations across the country, offers personalized skincare treatments for members every 30 days, creating a schedule aligned with other members to foster community.

“Community building is a lot about not just getting the results and [feeling] good, but also being able to have a commonality on their experiences and share what they feel,” Glo30’s founder and CEO Arleen Lamba told CNBC.

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

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

“As people come into the studio, people are also leaving the studio, and we recognize that they recognize each other, they would actually make new friends,” she said, adding that especially post-pandemic, the company has seen a growing number of social groups form in the treatment rooms.

Lamba said she’s seen the craving for social connection increase with the rise of social media, but that creating community can often happen in untraditional places, like Glo30. At the same time, that social interaction isn’t as “overwhelming” as other places like parties or big group events, allowing for intimate socializing, she said.

In the past two years, Lamba said the number of Glo30’s franchise units in development has grown 67.5% as it sees more demand for its services.

The boom of third spaces goes beyond wellness, too. Exclusive restaurant memberships, gyms, creative spaces, social clubs and more are gaining more popularity as consumers search for ways to build community outside of their houses and offices.

At Glo30, Lamba said she’s seen 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 true connection,” she said. “We get to be witness to someone’s life — their highs, their lows, their middles — and we are the constant, and that, to me, is what the third space is about: No matter what kind of day you had out there, good or bad or medium, this space belongs to you. And when you come to this space, people will know you, see you, appreciate you and be glad you’re there.”