Ah the dreaded "vacation". It is a lot of work and is hard on these little ones being in a strange place. First of all, you are going to have to get over what other people think about your parenting style (in other words, who cares if your MIL is wondering why you're letting your son cry). This is much easier said than done. My grandmother couldn't stand when I let my little one cry to get to sleep, but honestly, nothing else worked with him.
Now, you may have to give a little in order for him to get some sleep. See if you can sit with him or rock him a little bit or something before you put him down. Maybe stay in the room with him and sing him a song or something that will help him get adjusted to his surroundings. If none of that works, then you may just have to leave and let him fuss until he goes down. Is he staying in the same room with you, only in the pack and play? If so, then maybe you could lay down on the bed and just stay in the room until he goes to sleep and then get up and leave.
If he is 2, then he can certainly understand what you say to him, so explain everything in very simple terms. Tell him it is just like sleeping in that bed at home since you said you had him sleeping in it there. He may not have the vocabulary yet to say much back to you, but he does understand. Unfortunately, by the time you get it all figured out, the vacation is usually over. :-(
Best of luck. I know it's hard, but try to give a little, but be firm when necessary (i.e. not letting him climb out of the bed) and you'll get through it.