Lyric discussion by pianomatt 

Cover art for Holiday lyrics by Vampire Weekend

I think this song is about a girl in the middle of a war longing for a vacation. I don't think it's the middle-east though. A few things point to it being set in England in World War II:

The word 'holiday' seems to reference British English where holiday often means vacation.

"A vegetarian since the invasion" references how many people were vegetarian during the war due to a lack of meat production.

"96 point Futura" is a font that would have been used on a front-page during that time. You wouldn't see Futura on a front page these days.

I just love this song, it speaks to the sense of longing amidst chaos we all face.

Song Meaning

I think the "AK in the yellowy day glo display" sets a middle eastern scenario, which is a very sunny day, and an AK47, which is a modern weapon and usually used by terrorists and militia and stuff

You're right that it's the middle-east, but just to nitpick, the AK-47 isn't a "modern middle-eastern weapon", it was a standard issue rifle of the Soviet Union. Most terrorists and guerillas use AK-47s now because there are so many of them and they're relatively easy to get.

@pianomatt I don't think so because he mentions Cutter spray, in this context I'm assuming it's one of their insect replants, this brand product didn't exist during WW2.