We had a great stay at Blue Reef Sport and Fishing Lodge. Hotel owners are very friendly and helpful. The hotel is located right at the beach, you step out of your room and onto the sand! Really nice beach front with sun chairs and lots of spaces to sit and relax. We stayed for three nights for kiting and beach life. The hotel restaurant is really good, very high quality and changing menu every day, much more than we expected from a backpacker style hotel. Close to Uhuru kite center and numerous other kitesurfing and water sports facilities.
Some things to be noted about the room however: There is no door between the bathroom and bedroom, so perhaps not for the shy. Water pressure in the shower is not the best and the water is a bit salty. This is really nothing to be surprised at taking price and location into account, but if fresh water is very important to you than a resort style hotel is a better bet on Zanzibar, where water resources can be scarce.
The comfort of the room would have been improved by a chair or two, as there was nothing to sit on in the room apart from the bed. Living on the beach it would be great to not have to sit on the clean bed sheets when you are all sandy.