A Massage Parlor — written Massage Parlour in Canadian or British English — is officially an establishment where massage services are offered and take place. Although the phrase “Massage Parlor” by itself is neutral, the term is generally used for those places that provide commercial Sensual Erotic Massage services and/or sexual services including sexual intercourse.
In fact, it’s not uncommon that a Massage Parlor — notably in countries or states within countries in which prostitution is an illegal activity — is actually (partly) a disguise for a brothel, that is, a cover i.e. front organization for a place of sexual services and/or prostitution.
Mind however that offering sexual or erotic services is not necessarily prostitution. The legal definition of “prostitution” depends very much on individual countries. In Japan, for instance, prostitution is illegal, but defined as “having paid coital intercourse with an unacquainted person.”
In practice it means that all other sexual services — fellatio, handjobs, anal sex, nude body-to-body services, and so on — are not considered prostitution and therefore legal activities within Japanese law.
Now, depending on the individual Massage Parlor, Happy Ending services, Striptease, “soapy bathing services,” Sexual Self-Service (the client is allowed to masturbate and achieve their self-induced “happy ending”), and/or Full Service (which includes sexual intercourse) may be provided, often as “extras” (to be paid, of course) on top of more regular sensual erotic massages.
You might actually see that Massage Parlors indeed offer genuine massage treatments such as non-erotic Swedish Massage, Sports Massage, or Thai Massage, or alternatively erotic massages without extra services such as Nuru Massage, Tantric Massage, Prostate Massage, or Sensual Oil Massage, and so on.
However, in many countries, a Massage Parlor rather consists of employees (masseurs i.e. practitioners) who offer “extra services” on top of regular erotic or non-erotic massages, but also a number of employees who don’t engage in sexual services.