A new study shows the number of visits to the Capital has increased by 580,000, from 3.27 million in 2010 to 3.85 million last year.
Bosses said the increase in visitor spend supported an extra 3822 jobs, while ten new hotels have been built in the last few years – creating an additional 1400 rooms.
City chief executive Andrew Kerr said: “This review tells us that the city continues to offer visitors from all over the world a fantastic experience, based on our amazing history and heritage, festivals and events and world-class visitor attractions.
“But it also makes it clear that we can’t take our foot off the pedal and we need to build on our success to ensure that we achieve the ambitious targets set out for 2020.”
Robin Worsnop, chairman of the Edinburgh Tourism Action Group, added: “The positive performance of the tourism sector is great news for the city and the review gives us a clear focus on how to continue to drive growth going forward.
“2017 is a great opportunity as we celebrate the Year of History, Heritage and Archaeology, plus the 250th anniversary of the New Town and the 70th anniversary of the Edinburgh festivals.
“There are also exciting new markets [being] identified – we’re already focusing on the rapid growth in the Chinese visitor market, and encouraging the tourism sector to develop products and services for other fast-growing markets such as accessible tourism and the youth travel market.”