L17's Investment Thesis: Hybrid Hospitality in Mexico’s Surf Coast

Introduction

The global hospitality market is undergoing a dramatic transformation. In Mexico especially, shifting regulations, rising platform fees, and evolving guest expectations are creating a unique opening for a new hybrid model: merging the consistency and service of traditional luxury hotels with the local authenticity and flexibility that made platforms like Airbnb initially attractive.

L17 Capital, under the leadership of Drew Holland — a seasoned real estate investor, entrepreneur, and financial strategist — is uniquely positioned to seize this opportunity. With over 15 years living and operating in the Ixtapa-Zihuatanejo region, Drew has intimate knowledge of the local surf and hospitality ecosystems. His extensive real estate experience, including oversight of portfolios exceeding $1 billion and management of Airbnb assets generating over $2 million per month, provides unmatched operational and financial expertise to execute this vision.

Short-Term Rental Market Trends in Mexico

Airbnb and VRBO revolutionized travel by offering local, home-like experiences. Yet today, travelers increasingly face high service fees (Airbnb guest fees can now exceed 16%), unpredictable quality, and tightening government regulations. In popular Mexican destinations, including Mexico City and coastal states, regulations now require STR registration, caps on nights, and taxes that erode profit margins for hosts and investors alike.

More importantly, guests themselves have become disillusioned. Recent data indicates a strong preference shift back toward boutique hotels, especially among higher-end travelers who value consistent service, amenities, and a sense of security. Boutique and "lifestyle" hotels are now the fastest-growing hospitality segment globally, projected to grow at a CAGR of over 6% through 2030.

Why Ixtapa-Zihuatanejo?

While much attention is given to overbuilt markets like Cancun and Riviera Maya, our focus is strategically different. L17 Capital is pioneering this model in Ixtapa-Zihuatanejo — a world-class surf and coastal destination with a strong tourism foundation but fewer large-scale, high-end hospitality options. This region has remained authentic, culturally rich, and more intimate than Mexico’s mega-resorts, offering an ideal environment for experiential hybrid properties.

Drew Holland's deep personal and professional roots in this area (over 15 years) give L17 Capital a massive strategic edge in sourcing, negotiating, and integrating local partnerships. Our approach starts here, expands to Oaxaca’s surf coast (Puerto Escondido), then to Puerto Vallarta, and potentially select Latin American and coastal U.S. markets.

The Hybrid Hospitality Model

Our thesis: Guests want the warmth and uniqueness of a local stay — but with the reliability, service, and consistency of a luxury hotel. We bridge this gap by building curated, boutique-scale resorts designed for direct bookings and loyalty-driven community engagement.

Key elements include:

  • Direct-to-Consumer First: Avoid high OTA fees and build our own brand ecosystem.
  • Loyalty Gamification: Guests unlock perks and even future complimentary stays as they return or stay at multiple properties.
  • Local Partnerships: Each property features authentic cultural integrations, from culinary programs to art and surf experiences.
  • Technology-Enabled Service: Automation reduces admin work, allowing staff to focus on human connection, and each room will have a personal concierge. 

Proven Operator Advantage

Drew Holland’s operational resume is unparalleled:

  • Managed over $1 billion in real estate transactions and portfolios.
  • Background in accounting and finance, ensuring disciplined capital deployment and investor stewardship.
  • Firsthand experience with high-volume short-term rental assets ($2M+ monthly revenue), giving deep insight into guest behavior, pricing strategies, and platform dynamics.

Conclusion

With Airbnb and VRBO facing mounting guest dissatisfaction and government scrutiny, the market is ripe for a return to branded, reliable, and emotionally resonant hospitality. Our hybrid model isn’t just a reaction — it’s a natural evolution, blending the best of both worlds.

L17 Capital’s focus on Ixtapa-Zihuatanejo and Mexico’s authentic coastal destinations, combined with Drew Holland’s expertise, positions us to lead this next wave in hospitality investment.