Tourism New Zealand chief executive Kevin Bowler said the win supported the positioning of New Zealand as a "must visit" holiday destination.
"This award makes it clear that New Zealand is top of mind for UK readers. It is a great endorsement just as we're seeing positive visitor growth from this hugely important market."
Numbers dipped following the global financial crisis but are recovering.
Prime Minister, and tourism minister John Key, said the award was proof the Government's $600 million investment in tourism was paying off.
Key said the government had invested an unprecedented $600 million in tourism and tourism promotion since 2008.
"We believe one of the real strengths of the tourism experience in New Zealand is that it lives up to the hype. Too often people go to a destination where ultimately it is never as good as the brochure, whereas in New Zealand we think people come and get an experience that is better than the brochure."
About 2.8 million people visited New Zealand during the last year, spending over $7 billion, he said.
Tourism directly employed 4.7 per cent of the New Zealand workforce and indirectly employs another 3.6 per cent.
Key said the government would continue to invest across a wide range of areas in tourism infrastructure and marketing reach.
In other categories the best long haul airline was Singapore Airlines and hotel chain the Four Seasons. Telegraph readers voted Cape Town the best city.