While the exclusive Third Space fitness studio is best known for its celebrity clients corresponding to David Beckham and Prince Harry, those in charge aren’t only targeting the super-rich and celebrities.
Instead, they give attention to millennials who’re willing to pay a premium for a bit luxurious peace and quiet away from their hectic lives.
Although membership to the London-based gym group costs a hefty $280 to $318 a month, millennials – the generation that claims it will possibly’t save enough money to enter the actual estate market – make up the vast majority of Third Space’s greater than 35,000 members.
“The target audience is primarily young professionals who want to live life to the fullest and complement their busy lives with health and keep their stress levels under control,” says Colin Waggett, CEO of Third Space. Assets.
“We’re not talking about people earning £400,000 ($512,000), we’re talking about people earning between £120,000 and £130,000 ($154,000 and $166,000) – they spend maybe 10 percent of their disposable income with us.”
And while the “avocado toast” generation is incessantly mocked for overspending on every part except the down payment on a house, Waggett insists he “can’t judge that.”
Instead, London is consistently described as probably the most expensive cities The former Fitness First CEO points out that millennials aren’t wasting potential money on a down payment, they’re simply selecting fitness over other expensive activities.
“Many of our members share accommodation with other young professionals (whether it’s their own or rented accommodation) and there aren’t many things you can do in London where you can spend an hour and a half and effectively spend about £20 ($26) – which, when you break it down, is the true cost per visit.”
High-end gyms are all the fashion right away
There are many other gyms that millennials can pick from at a reduced price, without the bells and whistles that Third Space offers (for instance, reformer Pilates, climbing partitions, and five different yoga poses).
Membership within the chain Pure Fitness StudioFor example, it costs just £19.99 ($26) per thirty days.
But as Waggett explains, millennials want that luxury, or as he calls it, “the vibe.”
“I always make the comparison with hotels. You can get a hotel for £25 or £800. They all have a bed, a chair, a sink and a shower, but each element is different and the experience is different,” adds Waggett.
“It’s the same with us – you walk out and ask yourself, ‘Was it worth the money?’ The answer is clearly yes, because we have a lot of members and we’re growing.”
However members justify the expense, one thing is obvious: high-end gyms are all the fashion right away.
Third Space has grown since its first club in 2001, with eleven clubs as of July 2024 and more scheduled to open this 12 months.
According to Waggett, business has “more or less quadrupled” when it comes to revenue and membership, and a number of other clubs now have waiting lists.
Third Space’s Woodwharf Gym
Across the pond, Equinox has 41 locations in New York that average around 45,000 square feet in size (for comparison, lower-end gyms like Planet Fitness average around 15,000 square feet).
The upscale “country club” Life Time was founded in Minnesota in 1992 and now has greater than 170 clubs within the USA and Canada.
Recent openings include a 55,000-square-foot “boutique” space in Midtown Manhattan, complete with seven pickleball courts, a restaurant and so many amenities that it bills itself as a “third place, a second home.”
Essentially, high-end gyms aren’t any longer just places to work out: they’re salons, hotels, co-working spaces, childcare facilities, and more.
The CEO himself explores potential latest spaces
How does Third Space find the right place to draw millennials who live in shared apartments and need somewhere to let off steam after work?
“It’s a mix of science and art,” says Waggett, adding that he looks on the hotspots where his core audience works and lives before going there in person to explore the potential of those places.
“Then comes the artistic aspect. You have to acknowledge a selected real estate opportunity – you may have to see it within the morning, you may have to see it within the evening, on the weekend, on a sunny day, on a rainy day, you may have to see who’s coming out of the subway station, who else is doing business here.
“You have to go with your gut feeling because these are long-term investments. If you get it wrong, it’s extremely, extremely costly and expensive.”
Waggett not only makes philosophical comments about trusting your gut feeling as an alternative of information.
The CEO insists that he actually stands in front of potential sites within the pouring rain, analyzing the caliber of individuals walking by and mentally ticking them off with the words: “Member, not a member, maybe a member, maybe not.”
“If you’re signing a 25-year lease, it’s worth spending some time making sure you get the right one,” he adds.
Of course, just like the generations before them, Millennials will eventually escape their crowded city apartments and live a settled life within the suburbs.
But Waggett is not afraid of losing customers. Rather, he’s banking on this natural life cycle continuing to draw the following generation of discerning gym-goers.
“If you move away and live in Surrey (the suburbs outside London), there are no clubs there anymore, so you’re no longer a member, but the house you moved out of is now occupied by a Gen Z person,” he adds. “These changes are happening.”
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