Watamu is 120km (74 miles) N of Mombasa, Malindi is 24km (15 miles) N of Watamu
In the streets of Malindi, you're as likely to hear locals greeting you with "Ciao!" as "Jambo!", a sign of the influx of Italian tourists and long-term visitors who've fallen in love with the place and established homes here. Malindi is one of the Swahili coast's oldest towns, founded in the 7th century, apparently on the site of a more ancient village that may have had trade links with India as much as 2,000 years ago. The Chinese were trading here in the 12th century, and the Arabs in the 13th century. Malindi was, in fact, regarded by Arab documenters as the "capital of the Land of Zanj" and was known for its sorcerers and its links with Persia. Because it was less than a month's sea voyage from the Indian port of Calicut, it was an important Indian Ocean entrepôt with which the Chinese had the greatest contact. It was the sultan of Malindi, in fact, who sent as a gift the first giraffe ever seen in China. Europeans turned up only late in the 15th century when Vasco da Gama was warmly welcomed following a hostile reception in Mombasa. Rivalry between Malindi and Mombasa meant that the Malindi king was keen to score points with the Portuguese, so Malindi became Portugal's main base along this coast until Mombasa was finally conquered a century later. After Fort Jesus was built, the Portuguese invited the ruling family to relocate to Mombasa, which meant that Malindi spiraled into decline. By 1669, Malindi lay in ruins, and accounts observe that nomads had occupied what was left of its houses and mosques.
Today, however, it's the enormous Italian population that gives the town its special atmosphere. Designer hotels are a dime a dozen; delis sell locally produced pecorino, scamorza, and mozzarella; and the scene is painted with bronzed glamour girls soaking up the sun in crocheted bikinis and loud, flapping men clamoring for attention. Meanwhile, developers scramble to create glitzier resorts or set themselves up in the most glam villas. Most recent among these is The Lion in the Sun, built in 2008 by Flavio Briatore, the ultrawealthy Italian businessman (and lover of a long list of high-profile models) whose most recent intrigues included being banned from Formula 1. At night, after pasta, pizza, and real-deal espresso, there's casino action and gossip turns to the latest mafia-in-hiding sensation.
This shouldn't put you off, however. Ernest Hemingway caught a big sailfish here in the 1930s (the top hotel is named after him), and the area is still renowned for its full-day deep-sea excursions. Snorkeling the coral reef here is an unmitigated highlight of any visit to this part of the Swahili coast; if you simply want a fabulous beach without the overblown Il Familia scene, then head slightly south to less-developed Watamu. It's well known for entertaining some of the world's greatest sport fishing, while the gorgeousness of its beach, divided into three distinct coves by large coral outcrops, is reason enough to settle in for a few days. Watamu, too, caters overtly to a foreign market, but it's still possible here to escape the crowds and find a patch of sand that feels virtually private. It's also worth knowing that Malindi and Watamu are a mere 90 minutes from Tsavo National Park, which means you can mix it up with a bit of bush, beach, and undersea adventure. (Note, however, that Watamu's beaches are usually covered with seaweed from May to mid-Oct).
If you have a true yen for a sense of being in a remote and unfettered corner of the world, there's no better place than Delta Dunes, perched atop the dunes high above the Tana River Delta. It's unquestioningly one of my favorite spots in East Africa -- wild and unencumbered by the weight of modernity, these tranquil wetlands are unique in East Africa, with marvelous creeks and waterways stocked full of aquatic species, incredible birdlife, and large numbers of hippos and crocodiles that somehow exist in the semi-saline waters close to the ocean. And getting there is an adventure all on its own.