Libvirt ships an "NSS" module which can be used to enable applications on the host to connect to guests based on a name that's matching the guest name. This is great, but has some limitations

• The libvirt-nss RPM needs to be installed, and nsswitch.conf updated
• Not all applications use glibc's resolver pipeline, some directly do DNS queries
• The NSS module does not respond to fully qualified names

On machines, running systemd-resolved it is possible to have an alternative integration

Consider a virtual network with a domain name set, and some static hostnames set

  <bridge name="virbr0" stp="on" delay="0"/>
  <domain name="default.com"/>
  <ip address="192.168.122.1" netmask="255.255.255.0">
    <dhcp>
    ...
      <host mac="52:54:00:fb:8b:d7" name="fedora38" ip="192.168.122.32"/>
      <host mac="52:54:00:ea:2a:33" name="fedora40" ip="192.168.122.17"/>
    </dhcp>
  </ip>

Inside the guest VMs, 'fedora38', 'fedora38.default.com' both resolve as hostnames, thanks to the guest using dnsmasq from the host.

On the host OS  we can achieve parity with this with two commands

$ resolvectl domain virbr0 default.com
$ resolvectl dns virbr0 192.168.122.1

At which point the host ought to be able to resolve DNS names for guests in the same way that guests themselves do.

Libvirt ought to be able to detect presence of systemd-resolved, and if so invoke resolvectl to register our local dnsmasq as the service for that NIC.