How does leaving the aircraft on the ground for x number of days keep holiday costs down?
Quite straightforwardly. Most costs are a function of flying hours (fuel, crew, maintenance). There are relatively few time-dependent costs. On the ground all you have is crew hotac, parking charges, and a few other things. So cheaper to do this than return the aircraft to base, and send it out again later.
Time was when an operator would look on such a trip to tie it in with a travel organiser at the destination to operate a "3 day shopping/football/whatever trip to London" or similar, which would give two revenue-earning return trips. I guess with low-cost carriers that market has been diluted somewhat, people do these on their own now. I presume the airline will still be looking for any ad-hoc work while on the ground at the destination.
Presume they're using European 737s for this, which are fully depreciated and have no other winter revenue work in prospect.