This is a lovely hotel if one accepts the lack of a/c. During the day, with shutters and doors open to the sea breeze, it is quite comfortable, but I found it oppressively hot to sleep.
The manager, Esther, is simply terrific, and everyone is extremely friendly. My room was lovely, with a private courtyard leading to the small swimming pool. There is a good restaurant and a good b'fast.
You need to decide whether to stay in Lamu Town (where this hotel is) or Shela. The latter is a bit more Westernized. There are no cars on the island, so you go up and down the coast via water taxi, for which you wade into the water up to your ankles. Bring sandals you are willing to get wet.