Yes web hosting does matter, I will explain you why and how it affects the SEO ranking.
When we create website our aim is to reach the audience faster with good quality content. But we often ignore the need of good quality web hosting.
Why it is so important
Because if you have an low quality hosting or server, that will not serve user requests faster. That ultimately means that you might lose potential traffic. Something’s server might throw 500 error or it shows resources limit reach. These are the most annoying errors for your end user. The problem is that these errors never show up when we browse the website. These error only comes when there is healthy traffic on your website or blog.
Now just imagine if you are browsing this type of a website, would you like to visit again. Studies shows that 1 out of 10 users only come back on the website.