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Denis Villeneuve’s “Dune” has been the talk of the Lido since Friday’s buzzy world premiere, with Timothée Chalamet, Zendaya, and the rest of a star-studded cast gracing the red carpet. But while Warner Bros. and Legendary Pictures’ sci-fi tentpole brought some welcome star power to this year’s Venice Film Festival, it could bring an even bigger boost to the Hungarian film industry, which brought its considerable skills and manpower to bear on hosting the $160 million epic.

It’s the latest success story for the second-biggest production hub in Europe, behind only the U.K., which has not only weathered the coronavirus pandemic but is on pace to reach record-breaking heights. Though production briefly ground to a halt in Hungary last spring – interrupting additional photography on “Dune,” amongst other high-profile projects – a swift response from the government and the industry alike led to a quick restart.

Since then, production has been in full swing. “We’ve never been busier,” says Adam Goodman of Mid Atlantic Films, which serviced principal photography on “Dune” in 2019.

Mid Atlantic, which recently wrapped shooting on Lionsgate’s “Borderlands,” starring Cate Blanchett and Kevin Hart, is in production on season three of Paramount’s “Jack Ryan” series, Sony’s horror-thriller “The Bride,” and Marvel’s “Moon Knight” series for Disney Plus, while prepping several new projects, including the second seasons of Showtime’s “Halo” and the Netflix series “Shadow and Bone.”

It would be a busy slate under normal circumstances, but the backlog of productions left in limbo by the pandemic has only added to the urgency. “I’m talking to studios who are budgeting to make commitments in order to…open up office in January,” he says. “They know that they’re going to have to move quickly to get ahead of other shows that are also [planning to shoot in] Budapest.”

Vivien Lászlóffy of Pioneer Stillking Films, which after the restart was able to complete additional photography on “Dune,” credits the industry for enacting strict protocols that created a climate of “reassurance and trust” for international productions. “We knew how to manage this as good as possible, with all the testing and all the COVID protocols,” she says. “At the beginning, we were all facing this new world. And now it’s become part of our daily life.”

Pioneer’s slate includes NBCUniversal’s “FBI International,” Lionsgate’s “John Wick” prequel, and the latest feature from Yorgos Lanthimos, “Poor Things.” Lászlóffy says production this year has been on par with 2019 – a record-breaking year for the industry – with no signs of slowing down. “It’s the other way around,” she says. “It’s getting busier and busier.”

Industry players credit the government for introducing a host of measures to keep the film business afloat throughout the pandemic, including an emergency fund to support freelance industry workers, and more than $3 million in grants to support local distributors and exhibitors. Entry permits for certain key industries, including film and TV production, were granted at a time when travel across much of the world was halted.

The measures have bolstered an industry that in the past decade has cemented itself as a go-to hub for studio productions outside the U.S., drawn by a 30% cash rebate (which can reach 37.5% through the addition of qualifying non-Hungarian costs), skilled crews, and production costs that are 30%-35% lower than those in the U.S. or U.K., and 25% lower than in Western Europe.

Direct film production spending in Hungary has surpassed $350 million every year since 2017, according to film commissioner Csaba Káel. Rather than rest on its laurels, however, the industry is constantly looking for ways to evolve. “I firmly believe that our industry will only be able to keep its leading position and competitiveness if we are focusing unceasingly on development,” Káel tells Variety.

Nowhere is that more apparent than in the expansion of the state-owned Mafilm Studio complex outside Budapest, which has hosted productions such as Villeneuve’s “Blade Runner 2049,” Paramount’s “Terminator: Dark Fate,” and Netflix’s “The Witcher” and “The Last Kingdom.” Construction is underway on four new sound stages that will boost studio space five-fold to 12,200 sq.m., giving a much-needed lift to an industry that is already operating at close to full capacity.

Other studios are keeping pace. Mihály Tóth of Origo Studios, which hosted “Dune” as well as projects including Focus Features’ “Mrs. Harris Goes to Paris,” says the studio’s new additions include a water tank purpose-built for the 2019 shoot of the Russian blockbuster “Chernobyl: Abyss,” a green-screen stage, and a host of air-conditioned warehouses and workshops. Plans are underway to extend the backlot and add new stages as well.

Each development bolsters the overall strength of the Hungarian industry. “We are not real competitors in the country, as the different studios offer various services and facilities,” says Tóth. He notes how productions such as “Blade Runner 2049” and Columbia Pictures’ “Inferno” were filmed at both Origo and Korda Studios, taking advantage of what each has to offer. “Cooperation between the studios saves valuable time and money for productions – and that is good for everyone.”

In charting the path forward, Káel likes to invoke the rich history of a film industry which celebrates its 120th anniversary this year, noting how a country that produced pioneers such as Fox Studios founder William Fox and Paramount Pictures founder Adolph Zukor – both Hungarian immigrants – has taken great strides to create what’s often referred to as “Hollywood on the Danube.”

He draws the comparison to Italy, which in the 1950s boasted a production hub that, much like Budapest today, lured the international blockbusters of its time while also producing the likes of Michelangelo Antonioni and Federico Fellini. Says Káel: “I used to say to my friends, ‘We can start a ‘Dolce Vita’ here in Budapest.’”