The Edinburgh Hotels Association, which represents more than 50 of the capital's leading establishments, said its members were forecasting bookings to be in line with 2019, with a last-minute surge anticipated.
Leading hotels are charging more than £900 a room due to the current levels of demand for a two-night stay over Hogmanay.
Organisers of the Hogmanay festival, which is expected to attract more than 30,000 revellers into the city centre, said more than half of the available tickets had been snapped up, with no drop off in sales since news about the Omicron variant emerged.
The run-up to Christmas is said to be "extremely busy" in the city, with many hotels close to capacity with bookings.
However the hotels association has admitted some operators are “nervous” about the prospect of restrictions being tighetened at the eleventh hour.
Edinburgh’s hospitality businesses have seen a surge in bookings since it emerged that its Christmas and Hogmanay festivals were returning this year.
EHA chair Neil Ellis said: “Hogmanay bookings are slightly behind 2019 at present but we’re forecasting that we’ll pick up the remainder over the coming couple of weeks to end up with occupancy levels similar to 2019.
“The next two weeks are extremely busy in the city with hotels and their food and drink outlets reporting being at near capacity.
“Operators are excited to be open again for the festive period, which allows many businesses to remain open in quieter times, but also nervous about any increased restrictions.
“We want to showcase Edinburgh to its residents, the rest of Scotland, the UK and the world. We want to have Edinburgh in everybody’s thoughts as a safe and welcoming destination.”
Louise Maclean, business development director at the Signature Group, one of Edinburgh’s biggest hospitality operators, said: “So far, bookings are holding up well with few cancellations and enquiries continue at pace.
“Taking a very ‘Covid safe’ and ‘regulations complicit’ line since we first reopened has reassured our customers that we’re safe, heavily-regulated and follow the rules.”
Leon Thompson, executive director of industry body UKHospitality Scotland said: “As well as the mandatory measures on wearing face coverings and use of the check-in app, businesses continue to focus on better ventilation, hygiene and sanitation.
“These are baseline measures which the Scottish Government continues to highlight as the most effective way to control any spread of infection. This means hospitality venues are safe places at which to socialise with family and friends.”
A spokeswoman for Edinburgh’s Hogmanay said: “Tickets are selling incredibly well.
“We’re currently tracking ahead of 2019, with over 50 per cent of tickets sold for the Party at the Bells, only a few hundred EH postcode discount tickets left, and gardens tickets sold out. We haven’t seen any drop off.
“Almost all our events take place outdoors and we’re allowing a lot more circulation space.
"We’re also requiring all ticket holders to show proof of a negative lateral flow test or proof of being fully vaccinated (or exempt).
"We’re working daily and very closely with government, council and agencies to make sure it’s a safe event for everyone.