"Staycation" was on Lake Superior State University's recently announced list of banned words for 2009. The above comment is from a man who submitted this word for inclusion into the list.
In yesterday's blog post, I commented that the word "vacation" comes from the root word, "vacate", which means to leave one's current location, so, yeah, "vacation" does imply travel. "Vacation", loosely defined, is a time when you're vacating the places you usually inhabit.
The British -- and other Commonwealth nations, I believe -- use the word "holiday" in the same way Americans use the word "vacation". The word "holiday", however, literally means "holy day", and while people take time off for actual holidays such as Christmas and Easter, not all "holidays" are taken on holidays, i.e. "holy days". Perhaps this distinction is the reason why Americans started using the word "vacation" in place of "holiday". Americans might say they are "going on vacation during the holidays", but they'd never say they're "going on holiday during the summer".
Though the use of the word "vacation" has taken on broader meanings over the years, I grew up during a time when the phrase, "going on vacation" existed alongside "summer vacation". The first phrase had the emphasis on the word "going", which meant traveling somewhere far enough away where you'd not be sleeping at home during the time of vacation. "Summer vacation", on the other hand, just meant time off and away from school; it did not necessarily imply traveling away from home as well, though such trips were quite common, as many parents scheduled time off from work to coincide with their childrens' time off from school in order to take family vacations involving travel. But now with higher gas prices combined with shorter summer school breaks, employers offering fewer days of paid vacation, and stagnating wages, family vacations away from home are becoming less common.
Hence, the neologism, "staycation", where individuals, couples, and families visit things within a day's drive of their homes in order to save on gas and lodgings or simply veg out at home during their time off from work and school. I agree that the term has great potential for being annoying, but "staycation" is a more concise way of saying, "we'renotgoingtogoawayonourtimeofffromwork
So, I'd not have included "staycation" on the 2009 list, though it does admittedly have great annoyance potential if overused.