Vps host prefer using Xen because of the following good things :-
1. XEN performs extremely well with microbenchmarks giving upto 90% of the performance of native, which is excellent.
2. XEN has excellent management tools -xm.
3. XEN user and developer community is very active with almost 150 mails a day.
4. Has a bigger corporate presence.
Whereas Kvm is not very stable yet , runs with QEMU , Performance is not very good and Came late into the scene.