In certain cases, administrators may decide to use a separate standby host, which will take over and accommodate VMs from a failed host. This can be accomplished by using the third available option in the Admission Control Policy settings—Specify failover hosts.
When this policy is chosen, vCenter doesn't allow any VMs on the failover host even when a VM is being migrated there. This host will be used only when a failure occurs.
One important requirement is a shared storage available to all hosts, including the failover host. VMs running on the host's local storage will not be migrated in case of host failure.
If, for some reason, the failover host cannot be used to accommodate VMs, HA will try to restart them on other available cluster hosts.