Cloud hosting is a hosting method where you have a set of servers to distribute your computing services among networked servers. Since you have distributed services for your website you have better performance and improved uptime.
When one server fails the system will use another server in the pool to provide uninterrupted service to consumers.
In the cloud hosting, the server you are using is a virtual server running on a cloud computing environment.
Cloud hosting uses the technology to store files and data, run programs and allocate resources and bandwidth among multiple servers in a networked environment. So the whole system works as a single unit so that you do not feel anything when one feature of the system fails. Because there are other available services in the cloud to take the responsibility.