Yes it is. Every hotel makes allotments with travel agencies,
these allotments are not guaranteed by the travel agencies that
will be filled 100% in all seasons. So in order for the hotel to
have as many bookings as possible in all times, they make
allotments for more rooms than what they actually have.
So when the high season is on and travel agencies get more
requests for bookings, the hotel receives more bookings than it can
possibly accomodate. If they are overbooked, the hotel management
has the obligation to move the client in a same or better category
hotel in the same area.