The Aqua Resort in Busselton is WA's sole representative in the annual list of Australia's top hotels released by the world's biggest online travel site - TripAdvisor.
The list, dominated by Queensland, is based on comments and feedback from visitors.
It was topped by the Emirates Wolgan Valley Resort and Spa in the Blue Mountains, NSW.
Aqua, which was 24th, was described as a "spacious and beautifully decorated" resort with a "wow factor from the moment you open the front door".
Manager Grant Mott said the high ranking was recognition of the resort's good management, effective internet marketing and high-quality service.
"Recently, we have had lots of visits from professional people who would normally take their summer holidays in Noosa or popular locations on the east coast," he said.
Aqua was also proving popular with international visitors from Singapore, Malaysia and Britain.
WA also only had one representative in TripAdvisor's "small hotels" section.
Cocos Beach Bungalows in Broome was 25th and called "a perfect place in the wet season" and a "perfect break in paradise".
In the "bargain hotels" section, two Margaret River venues were in the top 20.
Vintages Accommodation was sixth and described as "clean, spacious and comfortable", while Edge of the Forest was 19th and described as a "lovely little place with a personal touch".
In the bed and breakfast section, Llewellin's Guest House in Margaret River was third with its "excellent hospitality and fab breakfast" and Baudins in Busselton was 22nd where "the only disappointment was not staying long enough". Burns Beach Bed and Breakfast was 23rd and described as "a real find".
The world's best hotel was named as the Grand Hotel Kronenhof in Pontresina, Switzerland.