The origin of Melbourne-born director Kitty Green’s latest film dates back to 2017 and the release of Hotel Coolgardie. Green first saw the documentary while sitting on a film festival jury, and the story of two Finnish backpackers who, after losing all their money, take jobs in a desperately remote Western Australian mining town where they face shocking sexism, stuck in her mind.

Two years later, Green made her first foray into the world of narrative film with The Assistant, which she wrote, produced and directed.

The film, starring Julia Garner in a tour de force, was generally considered to be the first drama to tackle the #MeToo fallout. Green’s background as a documentarian – she won an AACTA Award in 2013 for her documentary Ukraine Is Not a Brothel, her follow-up short The Face of Ukraine: Casting Oksana Baiul was nominated for awards at the Berlinale and Sundance film festivals, and she’s also behind the 2017 Netflix documentary Casting JonBenet – means she has always known that the truth can be stranger than fiction. Due for release on November 23, The Royal Hotel – another collaboration with Garner – is her second narrative film, putting a fictional spin on the story depicted in Hotel Coolgardie, with American backpackers standing in for the documentary’s Finnish subjects.

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“I’d always wanted to make an Australian film,” Green tells Broadsheet. “But I wanted to make sure it was the right subject, and [the themes of Hotel Coolgardie] kinda combined everything I was interested in. Like, the gender dynamics, the politics of it was really interesting to me. There was a lot of room for tension and fear, but also the landscape was beautiful, so it was a nice combination of things.”

In the tradition of Australian thrillers such as Wolf Creek and Ivan Sen’s crime noir Limbo, The Royal Hotel uses the intense isolation of Outback towns to ratchet up the tension. “What makes it very creepy is the remoteness of that location. [The] landscapes really lend to that and it adds this layer of anxiety,” says Green. “It was fun to set it out there, to have this place where there’s no real police presence, no one can hear you scream. Also the interiors are quite claustrophobic, so the idea that [when you’re] outside it’s still just as freaky – it was interesting.”

The Royal Hotel was filmed on location in the local pub in Yatina, a small town about three hours north of Adelaide. A double-storey building with a verandah, a faded sign and faulty fairy lights, it’s the sort of pub all Aussies would instantly recognise for heralding heritage and history with an underlying sense of decay. Other nods to an Australian audience include Golden Gaytime jokes, goon, a great Men at Work cover and a servo bathroom key zip-tied to a milk crate.

“It’s funny, the Americans think it’s a horror movie – [they] think we’ve made Midsommar. They don’t see the humour in it, they don’t see the light and they miss some of the nuances,” says Green. “The Brits seem to get it, which is good, but [they] have this thing where they go, ‘Oh, that’s just Australia!’ and refuse to acknowledge this goes on in their pubs, too, which I was a bit disappointed with. But it’s nice to get it back home because audiences are getting here and picking up on nuances. It feels like it’s back where it needs to be.”

The Royal Hotel is in cinemas on November 23.