The last time Australia’s biggest city and tourism gateway failed to make the top 10 was in 2009, when it ranked 11. In this year's World's Best Awards, announced in New York this week, Sydney came in as the world’s number 12 ranked best city.

The New York-based Nancy Novogrod, editor-in-chief of the parent US edition of Travel + Leisure, one of the world’s highest-circulating and influential travel magazines, said that while Sydney "fares well for its sights and its people in the World’s Best Awards survey this year, the value category, which is always very competitive, is one area where the city fell short".

"Sydney has always been a favourite city of Travel + Leisure readers and a destination that we at Travel + Leisure love to cover," said Novogrod, whose title has a number of international editions around the globe, including in Asia, now Australia’s largest source of tourists, with China second only to New Zealand in number of overseas visitors.

As a result of the strong Australian dollar against the US greenback Sydney has emerged as one of the most expensive cities in the world for visitors, including those from the lucrative US market.

Sandra Chipchase, chief executive of Destination NSW, said the good news from the best city awards is that Sydney is still the number one city in the Australia, New Zealand and South Pacific region.

"The strong Australian dollar reaching a record high against the US dollar last year certainly has had an impact," she said. "In fact, due to current state of the European economy, Europe is ‘on sale’ for travellers, which is reflected in the number of European destinations in the Travel + Leisure top 10 cities for 2013."

"It should be remembered that the Travel+Leisure Awards were voted on during the period that the Australian dollar was at its peak. However, let’s not forget [that] Sydney is still the most exciting city in Australia!"

A spokeswoman for the Tourism & Transport Forum, the peak industry lobby group, said that its chief executive, Ken Morrison, was unable to comment on Sydney's rare non-appearance in the top 10 best cities list.

However, the city’s competitiveness as a major international tourism destination is likely to have improved in recent times with the recent steady decline of the Australian dollar against its US equivalent. The "Aussie", as it’s known, has been trading at about 91 cents to the US dollar on Wednesday compared to a peak of $US1.10 in July, 2011.

In the year ended March this year, Sydney and NSW received 296,000 visitors from the USA, totalling nearly for million visitor nights, with a total expenditure of $546 million.

Sydney maintains its number one position in the World’s Best Awards, ranking as the top city in Australia, New Zealand, and the South Pacific among Travel + Leisure readers, eclipsing both Queenstown, New Zealand, and the region’s second biggest city, Melbourne. Ahead of Sydney on the top 10 list were Bangkok, Istanbul, Florence, Cape Town, Kyoto, Rome, Charleston, Barcelona and Paris.