'Vacation' is widely used in this country (we coined it), but its us is mainly formal used for legal and University vacations between terms.
It is the assumptions behind the modern use of the word staycation' that niggle me. It is the assumption, that the word 'holiday' automaticcally means a holiday in a country other than Britain, and that now choosing to holiday in our own country, to visit the places that foreign tourists consider so desirable is somehow, a second best, so that we have to give it a special name, to make clear that it isn't a real holiday.
A holiday is a period away from home, given to enjoyment and it doesn't matter where you go, this country or another. A staycation is a holiday where you stay at home, but go out each day, or in weather like at present, just stay at home and lie in the garden. The most important thing is that you desist from your usual household chores, no cleaning, no useful activities( decorating,gardening etc) and keep cooking to aminimum.