I and three friends stayed at Karibu Zanzibar Hotel for three nights, and I have absolutely no complaints.
We stayed on the ground floor, in one of the two dormitories that they offer.
There are 5 beds, but we were given the option of buying the fifth bed so that no one else would stay in the room with us.
The room was beautiful! Large, silent ceiling fans over every bed, with mosquito nets and soft, comfortable mattresses.
There is an en-suite toilet room, and a shower room with a sink. The room is absolutely huge, very spacious and clean.
The staff are very friendly, even sharing their newspapers with us, and giving us extra towels and sheets. The continental breakfasts include tea, eggs, toast, and juice.
One feature that made us nervous was that we had to hand in our room key every time we left the hotel. I imagine this was because it was a dormitory key, so they couldn't allow half the residents to leave with the only key. But we had no problems.
The hotel is very close to many restaurants, including a 5 minute walk to the Forodhani Food Gardens.
Also, it is close to numerous narrow-street shops, where we found amazing bargains, beautiful clothes, and great souvenirs.
The people in the area are incredibly friendly and helpful, it was a fantastic experience.
All in all, a great bargain for a hotel in Stone Town!