Which one of the two sentences is grammatically correct and why?

Helen I'd say "advanced"

I agree. Neither of the sentences offered are grammatically correct.

I'd say that both are grammatical but neither is idiomatic.

Possibly a case could be made for the first one.

We paid a lot of money for this room and we expect an advancing level of service.

which could be glossed as,

We paid a lot of money for this room and we expect the level of service to get progressively better.