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.