The Edinburgh Hotels Association (EHA) has called for an urgent rethink of how the city is promoted globally in the wake of the furore over the two events, which are worth more than £150m to the city's economy.
It has warned that the city's tourism industry, which supports around 33,000 jobs, is under threat by "constant anti-tourism messaging" over the winter festivals, which sold around 900,000 tickets last year.
It claims other cities around the UK would "desperately" want to enjoy the scale success Edinburgh has had with its Christmas and Hogmanay events since they were launched more than 20 years ago.
Spokesman Russell Imrie said: "Negative voices are drowning out those who need these events and those who attend them and enjoy them."
The body, which represents more than 50 of the city's leading hotels, insists many small businesses in Edinburgh rely on them to "keep them sustainable all year round" and that it was misleading to suggest they did brought not benefit to local residents.
The EHA has intervened in the wake of controversy over an expansion of the Christmas market in Princes Street Gardens, despite a failure to secure planning permission for major new infrastructure, the scrapping of an ice rink in St Andrew Square following an outcry from property owners, and anger over a new wristband system to allow residents to get to their own homes if they are inside the official Hogmanay street party arena.
An internal probe is underway at Edinburgh City Council over a decision to hand event promoters a two-year extension to an £800,000-a-year contract to stage the winter festivals, which it secured in 2017.
A "root and branch" review of the Christmas and Hogmanay events, which will get underway early next year, will not take effect until 2022 at the earliest after it was instigated after the contract extension with Underbelly was agreed.
Russell Imrie, spokesman for the EHA, said: "Edinburgh’s Christmas and Edinburgh’s Hogmanay are large scale, professional events taking place in a small city centre against a magnificent backdrop of a historic landscape, buildings and, of course, the castle.
"It’s no surprise that this is attractive to both locals, visitors from other areas of the UK, Europe and rest of the world.
"Leisure travel and leisure experiences are a growing global tourism phenomenon and its correct that Edinburgh shares in this industry.
"We do however exist in a highly competitive global situation and if we don’t compete with other events and experiences, other cities and locations will soon offer something to attract visitors away from Edinburgh.
"There are many cities in the UK which would desperately want to have the success that Edinburgh has had with Christmas and Hogmanay events. They must look on us with astonishment as we complain about our success.
"The current furore risks Edinburgh being seen as anti-tourist which places the industry at risk and benefits nobody."
"I am concerned about the constant anti-tourism messaging, which gets into the mainstream and social media."
Mr Imrie said there was also a need to ensure that the winter festivals were promoted as being "as much for locals as for visitors"
He added: "We need to look at our messaging and PR around these events. This success needs managed and locals need to read about the benefits (both financial and experiential) that they bring to the city both in the short-term and the long-term.
"We are the place to be in UK at Christmas and Hogmanay. The events should be communicated as being as much for locals as for visitors.
"We should celebrate that we have created something special and successful and stop knocking success. We have to learn from this year. Self-criticism of such success does not look good.
"The city should realise that if we do not change our messaging and media comment, we are at serious risk of being viewed globally as anti-tourism with the inevitable downside that this will bring to employees, businesses, local residents and the finances of the city."
Mr Imrie's concerns echo those of Edinburgh Festival Fringe chief executive Shona McCarthy, who has warned that the city was developing an "anti-tourist" reputation due to growing complaints over "commercialisation" and "festivalisation" of the city centre during major events.
Charlie Wood, director of Underbelly, said: There is a larger debate going on in the city, about the impact of tourism and events in particular, which are such a large part of the industry.
"Christmas and Hogmanay are obvious and tangible in-your-face events which are easy for people to direct their frustrations at.
"The thing that frustrates us is that we actually work very hard to reduce the impact of these events.
"We accept that they are internationally focused and scaled events which are happening in quite a small city centre. They have an impact, which we accept, understand and try to reduce.
"Some people react to what they read on Twitter too quickly and don't bother to look into the details of what is actually happening.
"It seems extraordinary that there some people in this city, the capital of Hogmanay, who do not want to celebrate the fact that tens of thousands of people are looking forward to celebrating the new year and the new decade with the people of Edinburgh."