Techniques for resource allocation are described. Some embodiments provide a resource allocation manager configured to dynamically allocate physical computing resources amongst multiple virtual machines hosted on a physical computing system. The resource allocation manager receives information about the importance of activities that can occur on the multiple virtual machines. Activities may include or be based on virtual machine states, virtual desktop states, business activities or processes performed by users, or the like. Then, the resource allocation manager determines that an activity is occurring on one of the virtual machines. In response, the resource allocation manager reallocates physical computing resources of the physical computing system that are assigned or available to the one virtual machine, based on the occurring activity and its corresponding importance. The resource allocation manager continually and dynamically reallocates physical computing resources assigned to corresponding virtual machines, in order to match resource allocation to activity importance.