Using "been" or more precisely "has been" in this case as in "Tom has been on holiday" (that being the full sentence, removing the contraction "Tom's") makes the statement about something that began some time in the past and continued to occur until recently or still continues to occur.
"Tom has been on holiday."
This can mean that Tom was on holiday and just returned, or was away for a period of time and is now back, or Tom may still be on holiday, but that he has been for some time previous to the statement being made.
Note 1: We often use the contracted form of "have" along with the word "been", especially in speaking, changing it to "Tom's been" from "Tom has been" or "I've been" from "I have been" but it should be noted that while this usage is more common, it can cause confusion for learners of English if the origin of the contraction, in this case being the word "has" is not clear.
Note 2: "Vacation" is typically American usage, whereas "holiday" is typically British or Canadian usage (not sure about the Australians or New Zealanders), though both are correct and would be understood by English speakers to mean the same thing. For some reason Americans rarely (if ever) say they are "on holiday" and prefer to say "on vacation" though they will refer to certain times of the year as "the holidays" or "a holiday".