Ocean Sports Resort Watamu is a very laid back family friendly (and couple friendly) hotel which is equally welcoming of guests who wish to do no more sport than the 10 metre stroll to the (gorgeous and warm) water's edge.
The bar and restaurant - which are very reasonably priced - look over the beachfront and are a wonderful place to while away a few hours with a cocktail or two in the sea breeze.
There is a good swimming pool for when you want a change from the sea - but unlike in Malindi, where the beaches tend to be covered in seaweed, and offer little in the way of coves or visual interest- the sea here is calm, clear and beautiful.
If you do want to do sports the hotel can arrange various activities for you. We went sailing on a catermeran for a couple of hours. There is also a very interesting turtle sanctuary project down the road.
The rooms are pretty simple - but they are clean, and the aircon works and they all have view s out towards the beach. They're romantic in a simple way.
We booked half board - which I wouldn't bother with again. Its easier just to choose from the menu.
Their airport transfers are also a bit pricey. If you're in the game of saving money (and experiencing a bit of 'the real Kenya') you can take a matatu from Watamu to right outside Malindi airport for about $1USD each. More money for cocktails.