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Cape Town has been named the world’s best destination, The Sydney Morning Herald has reported.

The South African city triumphed in the Travellers’ Choice Destination awards, which were compiled by travel website TripAdvisor and based on a mixture of travellers’ favourite places and overall destination popularity.

Sydney emerged as the runner up, while Machu Pichu, Paris and Rio de Janeiro came third, fourth and fifth respectively.

TripAdvisor’s Emma O’Boyle commented, “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.”

The top 10 South Pacific destinations were also revealed, and included Sydney as well as Queenstown, New Zealand, and Papeete, French Polynesia.

InsureandGo offers great value travel insurance to Aussies jetting overseas to the world’s best destinations.