“Holiday” is an anti-war anthem that criticizes America’s war on Iraq, while at the same time reflecting and building up American Idiot’s main character. The track continues the tale of Jesus of Suburbia as he leaves his suburban home and ventures into the city.

The song itself is mostly an anti-war protest with some specific mentions against the Bush administration for returning the US to a Middle Eastern conflict. It urges the people to take a stand against war rather than ignore it.

Regarding the album’s main story-arc, the lyrics show how Jesus of Suburbia has just left town and is living his life on the streets. Though he has fun at first, this life takes a toll on him and he tries to convince himself at times of why he left.

The song’s ending fades into the following track, “Boulevard of Broken Dreams”. This is reflected in both of their music videos, where “Holiday” ends with the band’s car breaking down while “Boulevard of Broken Dreams” starts with the band walking away from the same car.