"Holiday" features instrumentation from guitars, electronic handclaps and synthesized string arrangement while talking about the universal sentiment of taking a holiday. Universally revered by critics, commercially, the song was Madonna's first hit single when it entered the top twenty of the Billboard Hot 100 while peaking its dance chart. The song was also a crossover success, entering the top ten and top forty of many European countries. A re-release of the song in 1985 saw it peaking at two in the United Kingdom.
Madonna has performed "Holiday" on most of her tours—most recently at the 2009 leg of the Sticky & Sweet Tour. The song is generally included as a part of the encore or as the closing song of the show. Different performances of the song are included in the recorded releases of her tours. Cover versions by a number of artists have been released, and it has also appeared in the soundtrack of sitcoms like Will & Grace.