BINZ, Germany (Reuters) - When the Iron Curtain fell, Edith Behrenstengel and Crista Schlatow leapt at the chance to go traveling across the globe. Now the two pensioners are just as likely to take a holiday in their native Germany.
"We've traveled the world and never would have thought to come here 20 years ago, but it's rather nice and was built up so fast," said Behrenstengel, a former secretary day-tripping in the state of Western Pomerania in the country's east.
Close-to-home holidays dubbed "staycations" by trend-watchers have proliferated in the financial crisis, but now the travel industry is gearing to draw another crowd -- aging populations in countries like Germany whose spending power may outlast the downturn.
You could call them "greycationers": the 50-plus age group mutating under a massive influx of baby-boomers who grew up in the 1960s. After redefining youth culture, they are now making their mark on older age.
Health pursuits and sports, spas, swimming and cycling are all popular, as are vacations organized around cultural events like concerts and museum visits, tour operators say.
In Britain, where domestic holidays are also in vogue, summer rock and folk festivals are multiplying and boomers seeking to shun the coach-tour badges of old age are taking road trips in cult autos like the Volkswagen Microbus.
The most recent report by the United Nations Travel Organization in June said domestic and short-haul travel in Europe was holding up better than long-haul so far this year.
The impact of the trend is particularly marked for Germany, Europe's largest economy and home to the world's most diehard tourists. Germans spend more abroad in absolute terms than any other nation -- including the United States, whose population is four times greater.
In 2008, they spent $91 billion on foreign travel, compared with $80 billion spent by U.S. nationals, the U.N. report showed.
Data from Germany's statistics office show growth in local recreation is supporting the hotel and restaurant industry, worth some 51 billion euros ($73 billion) annually, and helping offset a decline in business travel.
And Germany has the world's third highest median age -- 42.1 years -- after Japan and Italy, U.N. data show.
"Seniors today are more active, financially independent, and eager to travel," said Klaus Laepple from Germany's DRV travel association. "Their favorite destination is Germany."
A study released by the Economy Ministry last month showed the senior age group is expected to take 20.3 million domestic holidays a year by 2020 compared with 17.2 million in 2007.
The trend may not be strong enough to offset this year's overall decline in Europe's hospitality sector, but it is helping the German economy, which has just exited its worst recession since World War Two.
While overnight visits by foreigners fell this June compared with the same month in 2008, accommodation for native Germans rose 5 percent, lifting the overall number of bookings 3 percent, statistics office data show.
Germany's largest travel groups, including Rewe, Thomas Cook's Neckermann, and TUI have expanded their offers inside Germany and are increasingly catering to specialized themes like health and culture.
TUI this year published its largest ever German catalog, with a new beach section covering the country's small northern coast. Its main target group, which it calls "Best Agers" in English, is over 50.
"Given the demographic trend, the importance of this group and seniors to the travel industry will grow even further," said TUI spokeswoman Anja Braun. "They have steady disposable income and are somewhat recession-proof."
One TUI chain specialized in foreign vacations has opened two new lakeside resorts in Germany in just over a year.
"Vacations on the North Sea and the Baltic are definitely 'in' this year," said Ingrid Hartges, managing director at Germany's DEHOGA hotel and restaurant association.
Tourism on Germany's northern coast has boomed since the fall of the Berlin Wall, and the surge gives no sign of abating.
The Baltic Sea town of Binz, on the island of Ruegen, has transformed itself from an enclave for functionaries of communist East Germany into an upscale resort centered on a restored century-old spa.
Every year, the number of hotel beds in Binz -- whose population is just 5,900 -- grows. In 2008 it hit 13,285, up from 12,143 five years earlier.
Otto and Jutta Huechel, retired shop owners from Bochum in western Germany, have been regular visitors for eight years.
"In the past we've been to Italy, Turkey, France, Tunisia... But it's convenient here for health reasons," 67-year-old Jutta said from her covered wicker beach chair.
On any given day, Binz is filled with silver-haired vacationers. Restaurants offer "Senior Specials," while hotels pitch discounts to guests who reserve a year in advance. Bands play swing music at the main square but shut down promptly at 10 p.m., even on Saturday nights.
Demand for sport-oriented trips is growing, but visitors can also choose a traditional spa vacation harking back to Germany's turn-of-the-century health movement. Vacations with a health component are increasingly sought after, said travel agent Dagmar Merfort.
"The over-50 group definitely likes spa holidays," she said. "Especially since health insurance in Germany covers the physical therapy part."
Editing by Sara Ledwith