Vacilando comes from the verb "vacilar", which can mean to hesitate, but in Caribbean Spanish slang it means to party, have a good time, or chill out without any worries.
The song sings "Lelolelola y vacilando" (Lelolelola and having fun), using vacilando to paint a carefree, festive mood of people simply enjoying themselves on vacation.
"Vacaciones" opens the morning after a blackout night: "Me desperté, en la sala de una casa ajena" (I woke up in the living room of a stranger's house), boots and empty bottles scattered around him. Instead of regret, Wisin turns the wreckage into a punchline and a philosophy — he never needs a real vacation, because he treats every night like one.
That's the hook: "Yo no necesito vacaciones, ni dolores de cabeza / Solo me basta mis amigos y un traguito de cerveza" (I don't need a vacation, or headaches / My friends and a sip of beer are all I need). The rest of the song is a running list of what actually fills that space — a pool party, a nonstop "rumba," dancing until his feet swell — proof that for Wisin, the good life was never about the destination, just who's around him and how loud the music is.