It turns out this is because of a kernel bug (see https://www.mail-
archive.com/linux-ker...@vger.kernel.org/msg1152720.html).

A workaround to to add qxl.modeset=0 in /etc/default/grub for the kernel
commandline. After update-grub and reboot CPU usage is back to being
reasonable.

This also fixes the problem mentioned in the above email thread where
even when using virt-viewer QXL multihead fails to report more than one
availble display.

With qxl.modeset=0 virt-viewer correctly allows you to turn on up to
four virtual displays.

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https://bugs.launchpad.net/bugs/1571918

Title:
  Constant high cpu usage in xenial under qxl/spice

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