A Taupo bed and breakfast has been voted the second-best small hotel in the world.

The Pillars Retreat was acclaimed by customer reviewers on the website TripAdvisor in its Travellers' Choice Awards 2016. A second Kiwi property, Queenstown's The Dairy, was ranked 10th. The first-placed property was Edgar House, in the UK city of Chester.

Edgar House in Chester, United Kingdom, was voted best small hotel in the TripAdvisor awards. Photo / Supplied
Edgar House in Chester, United Kingdom, was voted best small hotel in the TripAdvisor awards. Photo / Supplied

A Mediterranean country manor, the Pillars is located a few minutes from the Lake Taupo township and has four luxurious guest rooms and three acres of formal gardens.

Reviewers on TripAdvisor called The Pillars a "piece of paradise" offering a "beautiful, serene and relaxing stay" in "a gorgeous guesthouse with beautiful gardens".

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The Pillars is also committed to eco-friendly practises and serves delicious organic breakfasts.

Queenstown's The Dairy is a boutique hotel with a difference - every morning cooked breakfasts are served in what was once a general store, which dates back to the 1920s.

The Dairy Private Hotel in Queenstown is a great place for afternoon tea. Photo / Supplied
The Dairy Private Hotel in Queenstown is a great place for afternoon tea. Photo / Supplied

One guest at The Dairy encouraged visitors to "do afternoon tea around the beautiful log fire - it's lovely".

The spa at The Dairy Hotel in Queenstown. Photo / Supplied
The spa at The Dairy Hotel in Queenstown. Photo / Supplied

An outdoor hot tub and fireplace offer a warm way to enjoy the cool mountain air and stunning scenery.

The top 10 list of top-rated small hotels

1. Edgar House, Chester, UK
2. The Pillars Retreat, Taupo, New Zealand
3. Saffire Freycinet, Coles Bay, Australia
4. Nayara Springs, La Fortuna de San Carlos, Costa Rica
5. The Place Luxury Boutique Villas, Ko Tao, Thailand
6. La Minerva, Capri, Italy
7. The Old Rectory Hotel, Martinhoe, UK
8. Riad Kheirredine, Marrakech, Morocco
9. Spirit of the Knights Boutique Hotel, Rhodes Town, Greece
10. The Dairy Private Hotel, Queenstown, New Zealand