Yes, it's safe to travel here. There were some kidnappings in the area around St. Catherine's monastery however it would appear these folk were on private excursions, and not part of main tour parties. Travel to St. Catherine's is not recommended, and the hotels with which my own centre is affiliated do not sell the excursion any more, as per foreign consular advice.
The fighting that has occurred in the North of Sinai is far removed from the tourist resorts and if you have any doubts, stay within the resorts. If you do book excursions to other locations - Cairo - for example - then actually the best way to travel is by air anyway (it's a 6 hour bus ride from Sharm) and you should book everything directly through your hotel. Although business has been down over the last couple of years, there's still plenty of these trips happening every day throughout Egypt, both in Sinai and the mainland, without incident.
Cheers
C.