Being a World Heritage Site, Stone Town has an active local conservation authority, and nearly all its hotels and guest houses are in renovated buildings located within the historic center. The western section is the more touristic, while the area nearest the market is the most authentic; if you want to live among the locals, the elegantly low-key Zanzibar Coffee House offers the best value in town. However, it's worth knowing that, given the maze of winding narrow lanes and dense concentration of shops, apartments, mosques, and temples, some visitors find being right in the center of it all claustrophobic and noisy. With most structures dating back 150 years or more, buildings are pretty porous, and the tinkling of a bell, drumming practice, crying child, beeping scooter, and taarab music will all mingle and drift along with the welcome breeze as it finds you on a rooftop or reclining in rooms once frequented by the long-deceased sultan and his wealthy traders. Personally, I find the proximity of real Stone Town life immensely engaging, but if you value your peace, you're probably better off booking a seafront hotel in the western part of town, where the gorgeous Serena Inn is hands-down the best hotel option. More affordable options are Beyt al Chai (opposite Serena), a small peaceful guesthouse with a great restaurant, and the new Seyyida Hotel, entering the fray with my "Classiest Newcomer" award. Of the three, only Serena Inn has a pool; if this is a prerequisite, the beachfront Tembo is an affordable option on this side of town. Alternatively, you can opt to stay at one of the beach resorts that lie a few minutes' drive north and south of the old town; of these, my favorite is Mbweni Ruins Hotel, a few clicks south but right on a gorgeous beach.
Note: At the time of writing, Emerson (of Emerson and Green fame) had run into a funding logjam, but do look to see whether his hotel Emerson Spice Inn is operational yet. Located a stone's throw from the market in the heart of old Stone Town, it's likely to be very charming.
Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.