Short answer that worked for me:
I also have Display set to Spice. If the VM's virtual Video hardware was set to VGA or QXL, I could not resize the desktop in the guest. When I changed Video to Virtio in virt-manager and restarted the VM, it worked.
Longer background in case it's useful to future visitors:
I ran into this problem in May 2020 and while the older answers here were of some help I thought I'd add some clarifications since the virt-manager UI and libvirt capabilities continuously evolve.
In my case, I have a Fedora 32 (KDE Spin) Linux host and the same OS in the guest. My virt-manager version is 2.2.1.
As with thorsummoner's original situation above I am using Display Spice so I can have goodies like the shared clipboard between host and guest.
The guest seemed stuck on 1024x768. xrandr
in the guest showed lots of higher resolutions available, but when I tried to set the resolution to 1920x1080 -- whether with xrandr --output Virtual-1 --mode 1920x1080
or with Plasma's Display setting -- it would only momentarily change to the higher resolution. Then, clunk, it would change right back.
Explicitly setting a higher level VGA video memory did not work (although it did help for another problem long ago).
No matter what I set virt-manager's View -> Scale to display menu options to, this still happened.
The fix for me was in the virtual hardware Video settings. Note: not Display, but a separate entry further down in the left-hand-side Hardware list in virt-manager.
If video was set to VGA or QXL, I could not resize the guest.
Then I changed the video hardware to Virtio, and the problem went away. I could resize the desktop with either xrandr
commands or the GUI Display preferences, and the changes would stick even after restarts.
Of course the guest VM should be cleanly shut down before making this change to its virtual hardware settings.