You have brought back some memories for me, it happened to me once, i was working in the hotel and living there and the barman and I had rooms next to each other, and we were great friends, everyone liked mike and got on well with him, including me, i often went to his room and listened to music,chatted etc, i thought of him as the big brother i never had, one day he reached over and kissed me, i was so taken aback and i got really angry and told him never ever to do that again, and our friendship survived it.

In fact when i left that town, apparently he was broken hearted and we so i gave it a shot at dating him, but it just did not work out, i did not have those feelings, i still think about him today, and i would love to catch up with him one day.

Now my point of telling this story is that i think you can be a lot more diplomatic than i was, because you have fair warning about it, I did not and acted out of shock,so you can decide what you are going to say and how, just let him down gently and i hope the friendship survives, if not, well you just have to move on.