I lived just outside of Kisumu in a town called Ugunja for 8 months and every time I needed to come to Kisumu and stay overnight, I would always choose the New Victoria Hotel to stay.
For me, its excellent value and very secure and you cannot complain for the money with what you get. During my stay here, I had many friends who would always try out other hotels in Kisumu, but they would always come back to using the New Victoria Hotel as the others never matched in comparison.
The cost of the rooms may be a little more expensive than some of the other budget hotels in Kisumu, but after the experiences of friends I would say it is worth paying that little bit extra to stay here. Rooms start at Ksh800 for a single, and Ksh1050 for a double. A number of the double rooms come complete with balconies over looking Lake Victoria and it's an amazing sight waking up with the prayer calls coming from the mosques first thing in the morning, and watching the sun rise over the lake, and people start their daily routines.
For your price, the room is furnished and ensuite, with a balcony (not all rooms come with a balcony so make sure you specifically ask for this - it costs no extra!. There is hot water in the mornings and the beds are extremely comfy. The service by the hotel staff is second to none and in my experience always came with a smile.
The price includes breakfast in the morning. This consists of fruit, eggs (however you want them), toast, fruit juice and tea/ coffee. The breakfast room also has a television (which was a luxury for me!) where you can normally catch up on recent international news.
Next to the hotel is a restaurant, which does excellent spiced dishes and also a lovely bakery with delicious bread pastries, so you don't have to walk far to feed yourself if you don't want to!!
The hotel is perfectly located for walks into Kisumu city centre with both an Internet cafe (serving milkshakes and hamburgers) and a number of Banks (including Barclays) located 5 minutes away on Oginga Odinga Road. The main bus station with services nationwide (including Mombasa—a nice 15 hour bus ride away!) is also only 5 minutes away in the opposite direction.
The caution I would advise is if going into Kisumu at night, then the walk back to the hotel, as in any developing country is a little dangerous, so I would recommend catching a taxi. It doesn't cost much (Ksh100) but it might stop you from a nasty experience.
For the price and location, this is one of the best budget hotels in Kisumu and it's worth paying that little bit extra for the views!