The South American country - which is home to the likes of Easter Island and the Torres del Paine National Park - topped the poll for the fourth time at the 25th World Travel Awards.
Valparaíso, a port city in Chile, also won on the night, taking the prize in the category of leading cruise port in South America whilst the Atacama Desert was named the most romantic place in South America.
It comes after it was revealed that travellers are looking for experiences whilst abroad, with North American travellers are more worried about the things they can experience whilst on holiday rather than materialistic things.
Leigh Barnes, Intrepid Travel's regional director for North America, said: "Intrepid Travel has seen a 66 percent increase in bookings from North Americans on our authentic, experience-rich trips in the past two years alone. There is a trend in people looking to have more of a sense of purpose, and they are now using experiential travel as a way to achieve this."
Whilst Diana Ditto, director of product design for Collette, added: "Our explorations growth has been up year-over-year. We know that the added bonus of having a tour manager far outweighs the benefits of traveling alone, but what many don't know is how much goes into finding the perfect experiences for our guests. Our tour designers spend over 100 days on the road, creating unique experiences that just can't be booked through research."