As it is with the island of Ibiza, the city of Cabo is a destination for college students on vacation.
For comparisons, "as..." should be followed by a clause and "like ..." should not be followed by a clause. Given sentence is not the most concise way of mentioning the comparison. There is another option more concise and direct than this one.
(A) As it is with the island of Ibiza, the city of Cabo is a destination for college students on vacation.
Incorrect. Wordy.(B) Just as the island of Ibiza, the city of Cabo is a destination for college students on vacation.
Incorrect. "As..." without a clause denotes a role played by an entity. This option means that the city of cabo played the role of island of Ibiza. This is illogical.(C) The same as the island of Ibiza, the city of Cabo is a destination for college students on vacation.
Incorrect. "As..." without a clause denotes a role played by an entity. This option means that the city of cabo played the role of island of Ibiza. This is illogical. Awkward construction.(D) In a similar way to the island of Ibiza, the city of Cabo is a destination for college students on vacation.
Incorrect. "way" compared to a city. Illogical comparison.(E) Like the island of Ibiza, the city of Cabo is a destination for college students on vacation.
Correct. Concise and clear comparison. Island of Ibiza (a place) to City of Cabo (another place).