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Railholiday was established by David and Lizzy Stroud in 1998. They had purchased the upbuilding at St Germans Station in 1992 and converted it into a house. In 1996 a siding was discovered in the land adjoining the station. It was decided to find a carriage to use as a spare room, and an LSWR Passenger Luggage Van of 1896 was retrieved from a builder's yard in Liskeard. This was converted into living accommodation. An advert
was placed in Railway Express magazine as a means of covering the costs of the conversion. This was initially intended as a temporary measure to recoup the investment. The first guests arrived on the 20th June 1998. The Old Luggage Van appeared on BBC News in mid 1999. The business was instantly popular, so a decision was made to expand.
In 2000 Railholiday purchased a Mark 1 railway carriage from a member of Bodmin and Wenford Railway. This was moved in 2001 to an old goods yard beside Hayle railway station. This was divided into two lets. The first guests arrived in July 2001 to stay in the west end of the carriage. The east end was completed in June 2002. Originally named The St Ives Bay SK2, this carriage has since been renamed Harvey.
Railholiday became a limited company in 2003. Their companies house number is 04696398.
In 2003 Railholiday purchased GWR TPO no 841, which was moved to St Germans in 2006. This was placed in the cattle siding to the east of St Germans railway station and the Old Luggage Van moved to a site adjacent to the platform on the west end of St Germans station. This plot had formerly been used as a vegetable patch by the neighbouring property but had been derelict for a number of years.
In 2009 Railholiday took on a lease for the land below St Germans Railway Station.
In 2013 Railholiday let the first of the carriages on the new site, an 1897 Dean GWR clerestory slip coach called Mevy. This was converted into two bedrooms; a double bedroom in a former first class compartment and a triple bunk room in the guard's compartment.
In 2018 Railholiday let another carriage on the new site. Millpool is an 1896 GWR brake third designed to accommodate wheelchair users.
In 2024 Railholiday have four carriages to let at St Germans and one at Hayle. There are a further four carriages awaiting restoration. These comprise of a royal saloon built by GWR for Queen Victoria's Diamond Jubilee, the first ever GWR dining carriage, an LSWR brake third coach and a Taff Valley Railway carriage.