The awards are one of the biggest tourism reader surveys in the world with almost 90,000 votes cast by Daily Telegraph readers.
Tourism New Zealand (TNZ) Chief Executive Kevin Bowler says the win is a fantastic achievement and supports 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.
The award comes off the back of last week's global premiere of The Hobbit: Battle of the Five Armies where Tourism New Zealand and Air New Zealand transported a slice of Middle-earth to central London, recreating the entrance to a Hobbit hole inside Claridge's hotel, as part of the official media programme.
The 'New Zealand Room', created by the team from Hobbiton Movie Set and Tours, quickly became the "must see" room of the media junket.
Around 100 journalists of the 200 on the junket, visiting for interviews and stand-ups, and many more popping in for photos.
"Casting a spotlight on New Zealand and showcasing the country as the real Middle-earth has been the work of Tourism New Zealand for the past three years, and clearly, that connection has resonated with people here in the UK."
An impressive 11 per cent of holidays visitors from the UK stated the Hobbit was a factor in choosing New Zealand as a destination for their holiday.
The award was presented in a ceremony in London last night and New Zealand won out over South Africa and The Maldives to claim the top spot.
For more information about the Telegraph Travel Awards, and for the full list of winners go to www.telegraph.co.uk
Contact Emma Carter, Senior Communications Advisor, Tourism New Zealand
firstname.lastname@example.org | +64 21 243 0386