Instead, they\u2019re focussing on millennials willing to pay a premium for some luxury peace and quiet away from their hectic lives. <\/p>\n
Despite the London-based gym group\u2019s hefty $ 280-to-$318-a-month price tag, millennials\u2014the generation that says they can\u2019t save enough money to get on the property ladder\u2014make up most of Third Space\u2019s 35,000 plus members.<\/p>\n
\u201cThe demographic is primarily young working professionals, living their best life, wanting to complement their hard-working life with being healthy \u2026 and managing their stress levels,\u201d Colin Waggett, Third Space\u2019s CEO tells Fortune<\/em>.\u00a0<\/p>\n \u201cWe\u2019re not talking about people earning \u00a3400,000 ($512,000), it\u2019s people in the \u00a3120,000 to \u00a3130,000 ($154,000-$166,000) bracket\u2014they might be spending 10% of their disposable income with us.\u201d<\/p>\n And while the \u201cavocado toast\u201d generation has been mocked relentlessly for doom spending<\/a> on anything bar a house deposit, Waggett insists he \u201ccouldn\u2019t pass judgment on that.\u201d\u00a0<\/p>\n Instead, with London consistently ranked as one of the most expensive cities<\/a> in the world to live in, the former Fitness First chief suggests that millennials aren\u2019t wasting potential down payment money\u2014they\u2019re just prioritizing fitness over other expensive activities. <\/p>\n \u201cA lot of our members will be sharing flats with other young working professionals (whether that\u2019s their own or a rental situation) and there are not many things you can do in London where you can spend an hour and a half and spend effectively about \u00a320 ($26)\u2014which is, when you break it down, what it actually costs per visit.\u201d<\/p>\n There are many other gyms millennials could choose without the bells and whistles offered at Third Space (for example reformer pilates, climbing walls and five different types of yoga practice) at a reduced price tag. <\/p>\n Membership at the chain Pure Gym<\/a>, for example, costs as little as \u00a319.99 ($26) per month.<\/p>\n But as Waggett explains, millennials want these luxuries, or as he puts it, \u201cthe vibes.\u201d\u00a0<\/p>\n \u201cThe analogy I always point to is hotels. You can get a hotel for \u00a325 or you could get a hotel for \u00a3800, they\u2019ve all got a bed and a chair and a basin and a shower, but every element is very different and the experience you get is very different,\u201d Waggett adds.<\/p>\n \u201cIt\u2019s the same with us\u2014you walk out and go, \u2018Was that value for money?\u2019 Clearly, the answer is yes because we\u2019ve got lots of members and we\u2019re growing.\u201d<\/p>\n However members justify the expense, one thing is clear: High-end gyms are hot right now.<\/p>\n Third Space has progressed from its first club in 2001 to 11 as of July 2024, with further clubs to open this year. <\/p>\n According to Waggett the business \u201chas more or less quadrupled in size\u201d when it comes to revenue and membership size, with several clubs now operating a waiting list.\u00a0<\/p>\n Third Space\u2019s Woodwharf gym<\/p>\n<\/div>\n Across the pond, Equinox has 41 locations in New York, which average about 43,000 square feet (by comparison, lower-end gyms like Planet Fitness average about 15,000 square feet).<\/p>\n Meanwhile, upscale \u201ccountry club\u201d Life Time started in Minnesota in 1992 and now has more than 170 clubs across the U.S. and Canada.\u00a0<\/p>\n Among its latest launches is a 54,000-square-foot \u201cboutique\u201d space in Midtown Manhattan, complete with seven pickleball courts, a cafe, and so many amenities that it\u2019s pitching itself as \u201ca third space, a home away from home.\u201d<\/p>\n Essentially, high-end gyms are no longer just places to work out: they\u2019re salons, hotels, co-working spaces, childcare facilities and more.\u00a0<\/p>\n How does Third Space find the perfect spot to capitalize on flat-sharing millennials who want somewhere to let off steam after work?\u00a0<\/p>\n \u201cIt\u2019s a mixture of science and art,\u201d Waggett says, adding that he looks at the hotspots of where his core demographic works and lives before personally heading to those places to scope out its potential.\u00a0<\/p>\n \u201cThen it comes to the art part of it. You\u2019ve got to see a particular property opportunity\u2014you\u2019ve got to see it in the morning, you\u2019ve got to see it the evening, the weekend, on a sunny day, on a rainy day, you\u2019ve got to see who is coming out the tube station, who else is trading around here.<\/p>\n \u201cYou\u2019ve got to get that gut feeling because these are long-term investments. If you get them wrong, it\u2019s extremely, extremely costly and expensive.\u201d<\/p>\n Waggett\u2019s not just being philosophical about going with your gut over data. <\/p>\n The CEO insists he really does stand outside potential sites in the pouring down rain, analyzing the caliber of people walking by and ticking them off in his head as: \u201cmember, not member, maybe a member, maybe not.\u201d<\/p>\n \u201cIf you\u2019re signing a 25-year lease it\u2019s worth spending a bit of time making sure you get the right one,\u201d he adds.<\/p>\n Of course, like the generations before them, even millennials will eventually escape their crowded flats in the city in exchange for a settled life in the suburbs.<\/p>\n But Waggett\u2019s not worried about losing customers. If anything, he\u2019s betting on that natural life cycle taking place to attract the next generation of fancy gym-goers.<\/p>\n \u201cIf you move out and go and live in Surrey (the suburbs outside of London), we haven\u2019t got any clubs in Surrey, so you won\u2019t be a member anymore, but the house they moved out of will be occupied by a Gen Zer now,\u201d he adds. \u201cThose shifts happen.\u201d<\/p>\n<\/div>\nHigh-end gyms are hot right now<\/h2>\n
![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/07\/ThirdSpace_Woodwharf_JMS_08_05_24_Pool_054.jpg?w=1440&q=75\"\/)
<\/p>\nThe CEO scopes out potential new spaces himself<\/h2>\n
\nMaintain a competitive edge on your way to the C-suite with the Fortune Next to Lead newsletter. Every Monday, the newsletter provides the strategies, resources, and expert insight you need to claim the corner office. Subscribe now<\/a>.<\/div>\n