The Zanzibar Serena Inn is in the Shangani part of Stone Town. The main building was originally the External Communications headquarters, built in the 20th century by British colonial administration. The next door house is much older and was originally known as the Chinese Doctor's Residence. The explorer David Livingstone stayed here before one of his journeys to the African mainland. These buildings were restored and converted into a hotel in 1997 by the Aga Khan and the design reflects Zanzibar's heritage with Indian, Arabic and colonial styles. Although some say it lacks authenticity, generally the architects and local craftsmen have done a fine job and most travellers will not even notice such things.
If you want to sample what Stone Town has to offer but dont want to rough it as far as comforts are concerned, then the Serena Inn is ideal but somewhat expensive. It is fairly close to the airport making it a good place to stop for a couple of days at the beginning of your holiday or on the way out. Despite the prices I found the service to be excellent with friendly attentive staff. The concierge Youssuf was particularly helful.