Are there too many international schools?

Cast even the briefest glance at social media and barely a day goes by without another new international school being announced.

As of August 2025, ISC Research counts around 15,000 international schools educating 7.7 million students, with school numbers up 8 per cent and enrolments up 13 per cent over the last five years.

Take the Gulf Co-operation Council states (GCC:) about 42 new international schools were expected to open during 2023–24. Dubai alone welcomed 10 new campuses in 2024–25 and has plans for 100 more by 2033. Asia is keeping up the pace too, and Europe isn’t far behind.

International schooling is once again hot property, not least for investors.

It’s no surprise, then, that amid all this growth, people – teachers and school leaders especially– are asking if their market is saturated. Or rather, with so many newcomers, they’re wondering why it seemingly isn’t. With so much supply, can demand keep up?

Some light economics provides something of an answer.

Perfect competition

From the chalkface of any individual school, international schooling can feel fiercely competitive – in economic terms, almost perfectly competitive. Pick up an economics textbook and you’ll see perfect competition described as a market where:

• There are many buyers and many sellers
• Products are undifferentiated; buyers see the goods as identical
• Barriers to entry and exit are low for both buyers and sellers
• Buyers have perfect information on price, with no costs when switching suppliers

Intuitively, that fits many international school markets: plenty of willing parents and ever more schools, despite a school taking two to three years to open and requiring millions in capital expenditure. Offerings are very similar – one British-branded school often looks much like another – for example. Parents can also compare schools and fees online with ease and switching between schools is fairly straightforward.

New schools don’t need to be full to survive.

Taken together, these factors make the market feel saturated. We see the numbers, the announcements, the student churn, and it feels (perfectly) competitive. So why, at least in some markets, do so many new schools keep coming?

Monopolistic competition

In reality, in any given location, there isn’t one market of identical schools; there are multiple markets of similar ones. Economists call this monopolistic competition: small differences give each school local power, offset by local rivalry.

So, yes, there might be lots of schools, but:

Location

In congested cities, travel time constrains catchment areas. Schools beyond a feasible commute aren’t real competitors. New roads or metro lines can shift this, but in many locations, geography fragments demand.

Multiple viable schools can exist across a country, city or region because, individually, each is the “best” option for a given family within a given commute-constrained catchment area.

Differentiation

Schools compete on curriculum, language, timetable, co-curriculars, pastoral care, results, facilities, brand – even the principal’s personality. An IB, sports-heavy school isn’t the same as a traditional British boarding one. A school may be the only IB option in its catchment area, or simply the best cultural fit for a family.

The right micro-market can still deliver a return before the competition catches up.

Varieties of approach, style and culture create positional space  – differing parental demands are met by a range of differing supply – even where location may overlap.

Imperfect information

Despite abundant online content, families rarely have perfect information about schools. True quality is hard to compare, even for educators. Parents rely on signals such as accreditation, university destinations, inspections and word-of-mouth. These information gaps create, in turn, market gaps for schools. Whether it’s true or not, a claim to be “the best at X” attracts parents looking for that precise thing.

Effective marketing teams both create and find their way into those spaces. Perception, whether it reflects reality or not, and whether created by marketing or not, segments the market.

Switching costs

Even if parents can bear the financial costs of switching such as non-refundable application and registration fees, in practice, emotional ties to a school, new syllabi, new peer groups, new commute patterns, and non-financial costs are not desirable. Once families commit to a particular international school, it can be hard to move partway through a child’s education.

That friction adds to each school’s local market power; enrolment is “sticky”, which, perhaps paradoxically, both protects incumbents and attracts newcomers who, when they’ve captured market share, also want to enjoy the benefit of “protected” long-term revenues.

Price tiers

Price further segments the market; two schools can offer similar propositions at different price points, sometimes even on the same street. At the premium end, demand is often price-inelastic with families prioritising prestige and outcomes over cost. With price bracketed out to some degree, premium schools can cluster in the same areas, such as Jumeirah in Dubai, thriving because of other differentiators.

So, whilst price obviously matters, in many markets there are sufficient price points, and enough parental demand across those price points, for market space to exist and for competitors to coexist.

The bottom line

New schools don’t need to be full to survive, they just need to hit a viable occupancy threshold. In Dubai, for example, a mid-sized international school with 1,200 capacity and AED 60k average fees needs around AED 43 to 50 million in annual revenue to cover staff, facilities, and debt. That’s roughly 720 to 850 students paying full fees, 60 to 70 per cent of capacity.

There isn’t one market of identical schools; there are multiple markets of similar ones.

KHDA data shows that many new schools average 50 per cent use by their third year and, by year seven, approximately 80 per cent. That’s why investors keep backing new campuses. Budget schools may reach profitability earlier (lower overheads, faster local intake), while ultra-premium ones can take longer (higher fit-out costs, selective branding), but the right micro-market can still deliver a return before the competition catches up.

Even in busy markets such as Dubai or Bangkok, schools can still earn healthy profits in the short to medium term if differentiated enough – and profit attracts new players.

Why ‘crowded’ doesn’t necessarily mean ‘full’

The answer to the question, then, is that whilst a given market may feel “full”, it may still be able to absorb new schools. What looks like perfect competition at city scale is often monopolistic competition at school level. Micro-markets – defined by location, offer, information, switching costs, and price – leave room for new entrants.

For incumbents and newcomers alike then, the task isn’t to out-shout everyone, it’s to own a micro-market. If you are the least substitutable choice for a defined set of families and you have a strong market position or own a niche…or just the right location, the numbers are just noise.

At the risk of oversimplifying, you only need to watch your nearest competitors, those offering a similar proposition at a similar price in your catchment area.

The task isn’t to out-shout everyone, it’s to own a micro-market.

Of course, this all assumes sustained demand. And that’s not a given. In Vietnam, for example, ISC Research has reported that “premium-fee schools are facing enrolment pressures”.

Geopolitical tensions, trade pressures, regulation shifts, or currency shocks can shrink the pie fast. In some markets, localisation (preferring local employees over expatriates) is accelerating amid global headwinds – the highly paid expatriates whose children populate some international schools are not immune from job losses.

So, demand may not exist to fill supply forever; the latest gold rush will end at some point.

For now, though, in many markets, new schools keep opening because they’re not filling the whole market; they’re filling niches within it. That’s why the announcements keep coming. That’s why so many new schools keep opening.

That’s why many markets are “full”, but not yet “saturated”.

This article first appeared in the latest Winter 2026 edition of International School Magazine, out now in digital turnpage edition here.