Peponi is a lovely hotel located on the water in Shela. Staff are very friendly and the manager is great - gets to know each guest's name and provides lots of helpful tips. My large room was very comfortable and overlooking the ocean - went to sleep to the sound of waves each night. They meet you at the airport and take you by boat to the hotel.
You can swim right in front of the hotel or walk 5-10 minutes down the beach to the dunes area. Never crowded. Shela is a charming town a short boat ride (or 40 minute walk during low tide) from the town of Lamu itself. Everyone very friendly.
Great place to relax. Hope to be able to return.