You're trying to compare an operating system, software, and data installed on a certain physical hardware to that same operating system, software, and data installed by itself inside a hypervisor on the same original hardware. This comparison is just not valid, because almost no one does this (at least at first). Of course that would likely be slower. Thankfully, it completely misses the most common point of why you virtualize servers at all.
A better example here is to look at two (or more!) older servers in your data center. Look for servers that are performing reasonably well, but are old now and coming up on their refresh cycle. These servers already perform well on older hardware, and so thanks to Moore's law anything new you get is gonna be way over-spec'd.
So what do you do? It's simple. Rather than buying two new servers you buy just one, and then migrate both of your old servers to the same physical new device. When preparing to purchase your new server, you plan so that you have enough capacity to not only handle the load from both older servers but also any load from the hypervisor (and maybe a little extra, so that you can still get a performance boost and can allow for growth).
In summary: virtual machines provide "good enough" performance for most situations, and help you make better use of your servers to avoid "wasted" computing power.
Now let's stretch this a little further. Since these are old servers, perhaps you were looking at a couple simple $1500 pizza box servers to replace them. Chances are, even one of these pizza boxes could still easily handle the load from both hypothetical older machines... but let's say you decide to spend $7500 or more on some real hardware instead. Now you have a device that can easily handle as many as a dozen of your existing servers (depending on how you handle storage and networking), with an initial cost of only 5. You also have the benefits of only managing one physical server, decoupling your software from your hardware (ie: hardware refresh is now less likely to need a new windows license or cause downtime), you save a ton on power, and your hypervisor can give you better information on performance than you've had in the past. Get two of these and depending on how big you are maybe your entire data center is down to just two machines, or perhaps you want to use the second server as a hot standby to tell a better high-availability story.
My point here is that it's not just about performance. I would never take a perfectly good production server and virtualize it alone to equivalent hardware just because. It's more about cost savings and other benefits you can gain from consolidation, such as high-availability. Realizing these benefits means you're moving servers to different hardware, and that in turn means you need to take the time to size that hardware appropriately, including accounting for the hypervisor penalty. Yes, you might need slightly more computing power in total than if each of those machines were on their own physical device (hint: you actually probably need much less total computing power), but it's gonna be a whole lot cheaper, more energy efficient, and easier to maintaint to run one physical server than it is to run many.