The 70th anniversary celebrations, weak pound and lack of rival summer events have all been touted as contributing to a bumper year for the Capital.
It comes as a survey reveals the city currently has the highest average hotel prices in the UK - at £182 per room.
“Edinburgh is the world’s Festival City and we are expecting 2017 to be its biggest and most successful on record,” said John Donnelly, chief executive of Marketing Edinburgh.
Projections reveal nearly three-quarters of the city’s hotel rooms will be booked in the next three months - up almost seven percent on last year.
“The weak pound has led to a surge in international visitors this summer, especially from Europe and the USA, while staycation visits are also on the rise,” said Mr Donnelly.
“This is good news for Edinburgh, with more visitors out exploring and spending in the city’s restaurants, bars, taxis and attractions.”
Cabbies are also seeing early signs of a busier than normal year, offering advice to visitors on how to get around.
“Certainly looking like a very busy one,” said Edinburgh Taxi Association member Alistair McPherson.
“Taxi drivers are normally the first people tourists meet and chat with and we extend our welcome to them all.
“They should stay safe while travelling and always hail or call a licensed taxi.”
Lothian Buses, meanwhile, are hoping their travel app and online route information will keep the city moving.
“Across our business, we have been working hard behind the scenes to ensure we are prepared for the influx of visitors to the city over the busy festival season,” said commercial director Nigel Serafini.
“The priority for us is to make sure that, no matter how many people come to Edinburgh, our services provide a convenient, safe and relaxing way of getting around the city’s numerous events.”
A survey by online booking firm Cheaprooms.co.uk revealed the average price for a double room in Edinburgh this month is £182 - the dearest in the UK.
“This is primarily due to the fact that the Edinburgh Fringe leads to accommodation prices soaring due to high demand,” said Paul Joseph of Cheaprooms.co.uk
There was also a word of caution on what needs to be done to ensure the Capital can operate as normal.
“It’s obviously great that the festival season continues to break all records but it does come with challenges for the infrastructure of the city,” said Tory councillor John McLellan.
The aim should be to maintain the growth of festivals, accommodate visitors to the city and attract year-round tourism, added Cllr McLellan.
“There are also ongoing challenges from places which would dearly love to have what Edinburgh has,” he said.