Aside from VM extension improvements which are difficult to find information about there is also memory bandwidth to consider.
If you don't have all four memory channels populated with identical RAM on the Xeon then then it may be falling back to a dual or even single channel mode. Wikipedia states that the Westmere Xeons are be limited to DDR3-1066. This in turn is limited to about ~8.5GB/s per channel so for single, dual or quad channel you get the following bandwidths:
Single: 8.5 GB/s
Dual: 17 GB/s
Quad: 34 GB/s
The i7-8550U has a peak memory bandwidth of 37.5GB/s with DDR4-2400 RAM. For single channel operation it would be half that.
Single: 18.75 GB/s
Dual: 37.5 GB/s
Even if both systems are fully populated with the correct number of identical sticks, the i7 wins. If the Xeon has two sticks or is not functioning in quad channel mode, for whatever reason, then it will lose hard.
VMs are going to be memory bandwidth hungry. Not only do you have the host and guest machines doing work as a normal PCs, but you have the extra layer between the two emulating network devices, graphics cards, pumping around graphics and so on. Every cycle less waiting for the host to move data around will make the VM feel smoother.
Memory bandwidth really will matter here.
Those Xeons are 8-9 years old at this time. That's a huge amount of time, especially in the server world, where hardware is oftentimes considered inefficient 2-3 years after it's released. What CPU is that exactly? – gronostaj – 2019-08-29T12:12:25.510
What is your disk subsystem? Running multiple OSes off a single HDD vs an SSD will show massive performance gains. VMs usually bottleneck with disk/storage IO first, then RAM, then CPU. – essjae – 2019-08-29T21:32:18.047