What's the lounge-type place where people come to smoke and relax?

It's an opium den. From Wikipedia:

"An opium den was an establishment where opium was sold and smoked. Opium dens were prevalent in many parts of the world in the 19th century, most notably China, Southeast Asia, North America and France. Throughout the West, opium dens were frequented by and associated with the Chinese, because the establishments were usually run by Chinese who supplied the opium as well as prepared it for visiting non-Chinese smokers. Most opium dens kept a supply of opium paraphernalia such as the specialized pipes and lamps that were necessary to smoke the drug. Patrons would recline in order to hold the long opium pipes over oil lamps that would heat the drug until it vaporized, allowing the smoker to inhale the vapors. Opium dens in China were frequented by all levels of society, and their opulence or simplicity reflected the financial means of the patrons. In urban areas of the United States, particularly on the West Coast, there were opium dens that mirrored the best to be found in China, with luxurious trappings and female attendants. For the working class, there were many low-end dens with sparse furnishings. These latter dens were more likely to admit non-Chinese smokers.[1]"