It is probably indeed the cheapest place to stay in Papeete. But it is also the dirtiest and with the most unfriendly staff!
First: The dorm was stinking when I got there. The staff member said it was probably from some rotten food lying somewhere behind the fridge. I thought: "well I can live with that." and went to take a shower.

Second: As I got back from the shower and start to unpack my things, I see a cockroach crawling next to my pilow. I scream and then see another one walking around the room, and another one walking on the wall.... The other guests said they had gotten used to it already!!! I went to the reception to complain about the roaches, but they said that there was nothing they could do about it, and if it was a problem to me, I was free to go...

Of course I left. And they charged me 6 euros for the shower.

I will never stay in that place again.

We really had very little interest in Papeete, after having spent time in the Marquesas and Tuamotus, but had to overnight here twice for flight connections. Teamo Hostel turned out to be an excellent choice, in terms of cost, convenience, and quiet. It is an easy walk to the public market and waterfront, and the owners are amiable and helpful. They will help with airport pickup/delivery, at a rate comparable to the taxis. They also have a secured luggage storage, which made it easy to do an overnight to Moorea on the ferry, unencumbered by bags.