This study is a review that examines, with a holistic approach, the economic, cultural–social, and image dimensions of music festivals in the context of tourism. Literature findings indicate that music festivals generate short-term income growth and employment through expenditures on accommodation, food and beverage, and transportation, and that they create long-term value via multiplier effects and contributions to the socio-economic well-being of local communities. From a destination marketing standpoint, festivals contribute strategically to the formation and branding of destination image by shaping cognitive and affective perceptions, and they strengthen international recognition through media and social media visibility. On the cultural–social plane, festivals produce a meaningful “collective celebration atmosphere” that carries the tourist experience beyond individual entertainment by making local identity visible, reinforcing a sense of belonging, and facilitating intercultural interaction. In recent years, online/hybrid formats accelerated by digitalization and small-scale festivals focused on niche genres have emerged as trends that help destinations differentiate. However, environmental impacts—such as waste management, energy use, and carbon footprint—necessitate integrating sustainable festival management principles (recycling, renewable energy, local sourcing, etc.) into planning. The findings suggest, from an experience-economy perspective, that music festivals will continue to play a strategic role in the economic and socio-cultural sustainability of tourism.