I stayed 2 nights at the Hotel Lafayette in May 2004, because it was listed as an affordable lodging in my Frommer's guidebook. I won't stay there again.
This is at the low end of 2-star hotels in France. It's a collection of rooms rented out above a busy restaurant, but I think the restaurant is a better bet than the hotel.
My room was indeed cheap -- at 41 euros, even cheaper than the price quoted in my guidebook -- but I would gladly have paid more for a more comfortable place. If I had had time to find another lodging, I would have gone elsewhere, but I was stuck so tolerated the place for 2 nights.
My room was small, dingy, worn and depressing. Not a room you'd want to spend any time in, unless you're asleep.
Frommer's characterizes this hotel as "dignified" and "somewhat battered" -- I'd agree with the "battered" part. The place showed lots of age but no charm.
My room was tolerable for me as a single traveler accustomed to budget lodgings in Europe, but it would have been too small for 2 people. The bed had a crater in the mattress. The bathroom was small and old, but the plumbing worked fine. The sink did not have a plug for the drain -- just a gaping hole (dangerous for contact lens wearers!).
The room and bathroom were cleaned daily and seemed acceptably tidy.
The lobby of the hotel is small, cramped and dark, dominated by a TV that seemed to be blaring constantly. Again, not a place you'd want to hang out.
The hotel staff provides perfunctory service. Not particularly friendly. The matron of the hotel/restaurant is notoriously brusque, according to local friends of mine who dine in the restaurant now and then.
The Restaurant Lafayette is popular, but I didn't try it. I sense that the restaurant may provide a more satisfying experience than the hotel.
The Hotel/Restaurant Lafayette is well-located for entertainment in St. Jean de Luz. I wanted a hotel within easy walking distance of the train station. The Lafayette is close, but because of the street layout, it's not a convenient walk when you have luggage (you have to cross a pedestrian underpass to get to the station -- can't cross the busy main road).
There is a 2-star hotel right across the street from the train station, which I later found was recommended in a French guidebook. Hotel Verdun. It looked substantially more cheerful than the Hotel Lafayette. For a 2-star in St. Jean de Luz, I would try that rather than the Lafayette.