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VMs can also be live migrated to another server in the cluster with no downtime and backups don't need to take the VM down to do their thing. If in the future you want to move to physical hardware, you can use something like Clonezilla to back it up (not needed often, but still, something to consider).
Both have their places, but those factors are the main ones that come into play of when I want to use a VM or LXC.