I know that with dependencies it is possible to suppress alerts for devices if the parent goes down, but is anyone aware of an option to suppress alerts for a VM guest if the host is down?
Whilst you could create a new group for the guests on your host, and then create a new dependency, using the host as the parent and the new group as the child, unless you only have one host this won't help you as your guests will likely move hosts during compute optimization and the dependency will no longer be relevant.
However, I believe Virtualization Manager can handle this for you out of the box. Have a look at the SolarWinds Demo site specifically the Virtualization tab for a taste of what it can help you with.