Readers of The Australian Traveller named on Tuesday night Sydney as the best Australian city in terms of travel experience, best restaurant, best bar and best guided tour.

Quay was recognised at the best restaurant, Opera Bar the best bar and BridgeClimb the best tour. All three are found in Sydney.

Rival city, Melbourne, 2011's winner, won only one category, the best luxury hotel for the Crown.

For rural Australia, the best town was Margaret River in Western Australia, which won for its great restaurants, wineries, art galleries and surf. WA's Kimberley region was awarded the country's dream destination and best adventure holiday destination.

With the award, Simon Ambrose, chief executive of the Augusta Margaret River Tourism Association, said the town expects a big increase in number of visitors in 2013.

"Consumer opinion is becoming a hugely popular source of reference when making travel plans . . . To have taken out this award is a huge achievement and we expect holidaymakers to flock to visit Australia's Best Town," Mr Ambrose said.

He cited the town's ancient limestone caves, karn forests, pristine secluded beaches, world-class wine and local gourmet produce as among the attractions that Margaret River offers to tourists.

The town beat competitors Broome and Byron Bay for the coveted title.

Queensland was the best state overall, garnering seven awards, including best winter destination, while its Gold Coast was best summer destination.

Australian Traveller editor Georgia Rickard said the victory of Sydney is an indicator of the city's cosmopolitan attractions that clearly draw in domestic travelers.

Problem-laden Qantas won the best major airline award while QantasLink, its regional affiliate, garnered the best regional airline award.

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