The travel site, which operates in 29 countries and attracts 40m users a month, said that Cape Town in South Africa was voted the top city in its 2011 Travellers’ Choice Destination Awards.
The awards, which are based on reviews from travellers, placed Sydney as the second favourite destination, followed by Machu Picchu in Peru. Next on the list were: Paris, France; Rio de Janeiro, Brazil, New york City, USA; and Rome, Italy.
London made 8th place in the ‘World’s Top 10’ list, followed by Spain’s Barcelona and Hong Kong.
"These awards honour the world's best destinations as decided by those judges that really matter - travellers themselves," said Emma O'Boyle, spokesperson for TripAdvisor.
"Tourism is vital to the Australian economy so it's encouraging to see Sydney at number two in the global table, outshining significant tourism hotspots such as Paris, New York and London."