Mass coral bleaching events caused by elevated seawater temperatures result in extensive coral loss throughout the tropics, and are projected to increase in frequency and severity. If bleaching becomes an annual event later in this century, more than 90% of coral reefs worldwide may be at risk of long-term degradation. While corals can recover from single isolated bleaching and can acclimate to recurring bleaching events that are separated by multiple years, it is currently unknown if and how they will survive and possibly acclimatize to annual coral bleaching. Here, we demonstrate for the first time that annual coral bleaching can dramatically alter thermal tolerance in Caribbean corals. We found that high coral energy reserves and changes in the dominant algal endosymbiont type (Symbiodinium spp.) facilitated rapid acclimation in Porites divaricata, whereas low energy reserves and a lack of algal phenotypic plasticity significantly increased susceptibility in Porites astreoides to bleaching the following year. Phenotypic plasticity in the dominant endosymbiont type of Orbicella faveolata did not prevent repeat bleaching, but may have facilitated rapid recovery. Thus, coral holobiont response to an isolated single bleaching event is not an accurate predictor of its response to bleaching the following year. Rather, the cumulative impact of annual coral bleaching can turn some coral species ‘winners’ into ‘losers’, and can also facilitate acclimation and turn some coral species ‘losers’ into ‘winners’. Overall, these findings indicate that cumulative impact of annual coral bleaching could result in some species becoming increasingly susceptible to bleaching and face a long-term decline, while phenotypically plastic coral species will acclimatize and persist. Thus, annual coral bleaching and recovery could contribute to the selective loss of coral diversity as well as the overall decline of coral reefs in the Caribbean.