hostnamectl command is failing with an error "Could not set property: Access denied"

Issue

• hostnamectl command is failing with the following error.

[root@localhost]# hostnamectl set-hostname test-vm
Could not set property: Access denied

or

[root@localhost]# hostnamectl set-hostname test-vm
Could not set static hostname: Not allowed to update /etc/hostname.

• In /var/log/message the following error messages are found.

Dec 28 04:07:11 localhost systemd-hostnamed: Failed to write static host name: Permission denied
Dec 28 04:07:11 localhost systemd-hostnamed: Failed to write static host name: Permission denied